Technology License Agreement

TECHNOLOGY LICENSE AGREEMENT


This TECHNOLOGY LICENSE AGREEMENT (the "Agreement") is made as of July 9, 1998, between William J. Tobin, an individual residing at 134 Davenport Drive, Stamford, Connecticut 06902 ("Tobin"), PC Flowers & Gifts, Inc., a Delaware corporation, the principal office of which is located at 134 Davenport Drive, Stamford, Connecticut 06902 ("PCF&G"), and Fingerhut Companies, Inc., a Minnesota corporation, the principal office of which is located at 4400 Baker Road, Minnetonka, Minnesota 55343 ("Fingerhut").


R E C I T A L S


WHEREAS, Tobin and PCF&G have entered into an Employment Agreement, dated as of the date hereof (the "Employment Agreement"), Tobin, PCF&G and Fingerhut have entered into an Investor Subscription Agreement, dated as of the date hereof (the "Investment Agreement"), and Tobin, PCF&G and Fingerhut have entered into a Stockholders Agreement, dated as of the date hereof (the "Stockholders Agreement"); and


WHEREAS, as an inducement to Fingerhut to enter into the Employment Agreement and the Investment Agreement, Tobin and PCF&G have agreed to enter into this Technology License Agreement.


NOW, THEREFORE, in consideration of the agreements, grants and obligations set forth herein and for other good and valuable consideration, the parties hereby agree as follows:


ARTICLE I
DEFINED TERMS


Section 1.1 Definitions


As used in this Agreement:


"Affiliate" means with respect to a specified legal entity, any other legal entity that directly or indirectly controls, is controlled by, or is under common control with, the specified legal entity. As used in this definition, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a legal entity, whether through ownership of voting securities, by contract or otherwise.


"Employment Termination Date" means that date under the Employment Agreement on which PCF&G's payment obligations to Tobin terminate. 2


"Field of Use" shall have the meaning ascribed thereto in Exhibit A attached hereto and made a part hereof.


"Fingerhut Field of Use" shall have the meaning ascribed thereto in Exhibit B attached hereto and made a part hereof.


"Know-How" means any and all inventions, discoveries, concepts, ideas, techniques, developments, designs, works, information, know-how, trade secrets, data, formulae, codes, processes, instructions, software, methods, mask works and improvements.


"Licensed Patents" means (1) U.S. patent application 08/785,321 filed January 21, 1997 naming William J. Tobin as the sole inventor, as well as continuations and divisionals of such U.S. patent application, and any and all U.S. patents issuing on any of the foregoing, and (2) Patent Cooperation Treaty application PCT/US98/00975, filed January 20, 1998, applicant: William J. Tobin, and any and all national phase and regional phase applications of such Patent Cooperation Treaty application, and any and all patents granted on any of such national and regional phase applications.


"Non-Competition Termination Date" means that date under the Employment Agreement on which Tobin's non-competition obligations to PCF&G terminate.


"Other Intellectual Property Rights" shall mean patents, copyrights, trademarks, service marks, trade names, trade secrets and any applications for or registrations of any thereof, and all other forms of intellectual property rights that (1) are related to the past, present or future (as contemplated at the Employment Termination Date) business of PCF&G if made or acquired by Tobin prior to the Non-Competition Termination Date, or (2) are made using the equipment, supplies, facilities, intellectual property rights or Know-How of PCF&G.


"Technology" means any and all inventions, discoveries, concepts, ideas, techniques, developments, designs, works, information, know-how, trade secrets, data, formulae, code, processes, instructions, software, methods, mask works and improvements that (1) are related to the past, present or future (as contemplated at the Employment Termination Date) business of PCF&G if made or acquired by Tobin prior to the Non-Competition Termination Date, or (2) are made using the equipment, supplies, facilities, intellectual property rights or Know-How of PCF&G.


ARTICLE II
ASSIGNMENT


Section 2.1 Assignment of Existing Rights


Tobin hereby assigns to PCF&G all of his right, title and interest in and to all Technology and Other Intellectual Property Rights (together with the goodwill of the business symbolized thereby), but not including the Licensed Patents, whether or not patentable or copyrightable, and whether made, controlled or owned solely by Tobin or jointly by Tobin with others, free and clear of all liens, claims, encumbrances, restrictions and retained rights of any kind.


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Section 2.2 Assignment of Future Rights


Tobin agrees to assign to PCF&G all of his right, title and interest in and to all Technology and Other Intellectual Property Rights (including the goodwill of the business symbolized thereby), made or acquired by Tobin prior to the Non-Competition Termination Date, whether or not patentable or copyrightable, and whether made, controlled or owned solely by Tobin or jointly by Tobin with others, free and clear of all liens, claims, encumbrances, restrictions and retained rights of any kind.


Section 2.3 Further Assurances


Tobin hereby agrees to perform any and all acts as reasonably requested by PCF&G to assure that the Technology and Other Intellectual Property rights shall be held and enjoyed by PCF&G as well as to enable PCF&G to protect and enforce same to the fullest extent possible, including but not limited to executing and delivering to PCF&G all appropriate applications, declarations, oaths, petitions, assignments, and disclaimers in form and substance as may be reasonably requested by PCF&G, communicating to PCF&G or its designee all facts known to Tobin relating to the Technology and the Other Intellectual Property, and furnishing PCF&G with any and all documents, photographs, prototypes, models, samples and other physical exhibits, devices and records relating to the Technology and the Other Intellectual Property. PCF&G will reimburse Tobin for all reasonable third party costs and expenses incurred in connection with this Section 2.3.


ARTICLE III
LICENSE


Section 3.1 Grants


(a) Tobin hereby grants to PCF&G and its subsidiaries a fully paid-up, royalty-free, worldwide, perpetual, non-terminable, unrestricted, non-exclusive right and license under the Licensed Patents to carry out all lawful activities within the Field of Use (the PCF&G License"). Tobin hereby grants to PCF&G a non-terminable right to sublicense the rights licensed hereunder to Fingerhut and to its Affiliates for any and all uses within the Fingerhut Field of Use under such terms and conditions as PCF&G may determine in its sole discretion.


(b) PCF&G hereby grants to Fingerhut and its Affiliates (i) a fully paid-up royalty-free, worldwide, perpetual, non-terminable, unrestricted, non-exclusive right and license under the Licensed Patents during the term of this Agreement, and thereafter at a royalty rate to be determined by the parties hereto at such time, and failing an agreement by the parties within 90 days, at a royalty rate determined to be commercially reasonable at such time for the Licensed Patents by an expert appointed by the parties or, failing an agreement of the parties as to the expert, by an expert appointed pursuant to the rules of the American Arbitration Association and (ii) a fully paid-up, royalty-free, worldwide, perpetual, non-terminable, unrestricted, non-exclusive right and license under the Technology and Other Intellectual Property Rights, in each case for use within the Fingerhut Field of Use (the "Fingerhut License"). Neither Fingerhut nor any of its Affiliates shall be deemed to assume or be bound by any obligation to refrain from competing with PCF&G or anyone else whether as a result of any such sublicense or otherwise.


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Section 3.2 Further Assurances


(a) Tobin hereby agrees to perform any and all acts as reasonably requested by PCF&G to assure that PCF&G shall enjoy the full benefits of its licenses and rights hereunder, as well as to enable PCF&G to protect and enforce such licenses and rights to the fullest extent possible, includi ...