Exhibit 10.03
SOFTWARE LICENSE AGREEMENT
THIS SOFTWARE LICENSE AGREEMENT (this "Agreement") is made effective
the 28th day of April, 2001, by and between Xxx Xxxxx, who resides in Duchesne,
Utah, hereinafter referred to as "Xxxxx" or "Licensor", and Systems Research,
Inc., a Nevada corporation, whose office is in St. Xxxxxx, Utah, hereinafter
referred to as "Systems Research" or "Licensee".
WHEREAS, Xxxxx owns certain computer software more particularly
described in Schedule "A" attached hereto currently using the code name Quick
Access hereinafter referred to as the "Software"; and,
WHEREAS, Licensor and Licensee agree that Licensor grants the sole and
exclusive license to the Software with the code name Quick Access, as is more
fully described in Schedule "A" to Licensee.
NOW THEREFORE, upon the terms and conditions contained herein, Licensor
grants to Licensee the full and exclusive license to the Software as is more
fully described in Schedule "A".
1. DEFINITIONS.
a. "Application" shall mean Licensee's development efforts, which
are developed using the Software.
b. "Confidential Information" shall mean all Source Code and any
materials marked as Confidential Information, but excluding
Object Code or Documentation that does not disclose Source
Code. Confidential Information also does not include
information that:
(1) was in Licensee's possession before receipt from Xxxxx;
(2) is or becomes a matter of public knowledge through no
fault of Licensee;
(3) is rightfully received by Licensee from third party
without a duty of confidentiality;
(4) is disclosed by Xxxxx to a third party without a duty of
confidentiality on the third party;
(5) is independently developed by Licensee;
(6) is disclosed under operation of law; or
(7) is disclosed by Licensee with Xxxxx'x prior written
approval.
c. "Documentation" shall mean written explanatory materials
relating to the Software delivered to licensee and derivative
works based thereon.
d. "Enhancements" shall mean all improvements, fixes,
modifications, and other enhancements developed by or on
behalf of Licensee that relate to the Software.
e. "Intellectual Property Rights" shall mean the following rights
that pertain to the Software:
(1) rights in all U.S. and foreign letters patent and
applications for letters patent whether filed or to be
filed;
(2) rights in the trademarks that are enforceable under common
law, state law, federa1 law, or laws of foreign countries;
(3) rights in copyrights and rights in authorship;
(4) rights under the Semiconductor Protection Act or
equivalent domestic or foreign law; and,
(5) rights in trade secrets under common law, state law,
federal law, and the laws of foreign countries.
f. "Object Code" shall mean any machine executable code derived
in whole or in part from the Software.
g. "Source Code" shall mean any human readable code derived in
whole or in part from the Software.
2. TERM; LICENSING FEES.
a. Term. The term of the license shall commence on the date of
this Agreement and shall terminate three years thereafter.
Licensee shall have an option to purchase the Software upon
expiration of the term of this Agreement. See Option to
Purchase at End of License Term.
b. Licensing Fees. In consideration for the rights granted under
this Agreement, Licensee shall pay Xxxxx:
(1) an initial license fee of 4,000,000 shares of the
common stock of Systems Research, Inc. These shares
shall be restricted shares as defined by the
Securities Act of 1933 and shall bear an appropriate
restrictive legend; and
(2) a license fee equal to ten percent (10%) of all
license fees collected by Licensor for each
non-exclusive license sold, distributed, or otherwise
disposed of, externally by Licensee. The first
licensing fees shall be due on the first day of the
calendar month, or other period specified herein. and
the second and each subsequent license fee shall be
due on the same day of such subsequent month, or
other specified period, in which such license fee is
due until all fees have been paid. This license fee
shall be paid until a total of $2,000,000 ("Total
Licensee Fee") has been paid to Licensor. In the
event Licensee exercises its option to purchase the
Software at the end of the term of this Agreement
pursuant to paragraph 7, the option to purchase
payment shall reduce the amount payable under this
paragraph by the purchase option amount. If the Total
License Fee has not been paid at the end of the term
of this Agreement and the Licensee elects to exercise
its purchase option pursuant to Section 9
hereinafter, the license fee described herein shall
continue until the Total License Fee (less the
purchase option amount) has been paid Licensee.
(3) Licensee shall maintain true and accurate records in
accordance with generally accepted accounting
principles to provide the data necessary for the
computation of the licensee fee payable under the
terms of the Agreement.
(4) Xxxxx may, at his expense and no more frequently than
once each year, engage an independent auditor to
verify license payments. The auditor may take
abstracts from the relevant records of Licensee to
determine compliance with this Agreement. If any such
audit discloses short or incomplete payments by
Licensee exceeding $25,000 during any twelve-month
period, the cost of such audit shall be borne by
Licensee. If any such audits disclose short or
incomplete payments by Licensee for three or more
months in a twelve-month period, Licensee shall be
required to pay Xxxxx a penalty equal to the amount
of all underpayments in that twelve-month period.
(5) Licensee shall be solely responsible for any taxes on
license fees paid under this Agreement, including
state and local use, sales, property, and similar
taxes, but excluding taxes calculated solely on
Xxxxx'x income.
c. Place of Payment. All payments called for under this Agreement
shall made to Licensor, or any assignee of Licensor pursuant
to Section 7, at Licensor's address as set forth herein, or at
such other place as may be designated by Licensor, or such
assignee, to Licensee in writing.
3. LICENSOR'S PROTECTION.
a. Insurance. Licensee shall, at Licensee's sole cost and
expense, maintain insurance in such amounts appropriate for
its size and the industry in which it operates. The policies
for such insurance shall provide that Licensor shall receive
thirty (30) days notice of any termination, cancellation, or
alteration of the terms of such insurance.
b. Risk of Loss. The Software shall be stored in a manner
consistent with industry standards to store and safeguard the
Software from theft, damage or loss. This includes maintaining
the necessary backup copies and procedures to insure its
safety.
c. Marketing. Licensee shall use its best efforts to market the
software and any application developed. All software data
sheets, sales training manuals, demonstration tools, and other
marketing or sales materials for such marketing shall be the
responsibility of Licensee.
d. Relationship and Agency. This Agreement does not create any
partnership, agency, or other relationship other than that of
licensee and licensor in accordance with the express
provisions of this Agreement.
e. Development. Licensee shall be solely responsible for an
development, manufacture, reproduction, assembly,
distribution, sales, installation, maintenance, and support of
the Applications, Software, and Documentation.
4. REPRESENTATIONS AND WARRANTIES OF LICENSOR: DEFENSE OF LICENSED RIGHTS.
Xxxxx represents and warrants to Licensee that Xxxxx has good and
indefeasible title to and has all right and interest to and in all of
the Software licensed to Licensee, and has acquired sufficient
intellectual property rights protecting the Software such that the
Software may be used without violating or infringing any patent,
trademark or other intellectual property rights of any third party.
Xxxxx represents and warrants to Licensee that, with respect to the
Software, neither Xxxxx nor any of his Affiliates has received any
notice or is otherwise aware of any infringement by the Software of any
third party's patent, trademark or other intellectual property rights.
Neither Xxxxx nor any of his Affiliates has received any notice of
infringement, misappropriation or conflict from any person with respect
to the Software. Xxxxx covenants and agrees to indemnify, defend and
hold harmless Licensee from and against any claims of infringement or
violation of intellectual property rights of any person with respect to
the Software, provided that the Software licensed to Licensee
necessarily violates or infringes such rights. The consummation of the
transactions contemplated by this Agreement will not conflict with, or
constitute a breach or violation of, any agreement or understanding,
whether written or oral relating to the Software.
5. UNFAIR TRADE PRACTICES BY THIRD PARTIES.
x. Xxxxx shall have the first right to xxx any party for any
unfair trade practices involving the Software, at its own
expense, and shall keep Licensee fully informed of any
threatened or initiated litigation. Licensee agrees to permit
the use of its name in all such suits, to execute any
necessary documents, and to do whatever necessary to assist
Xxxxx in such suits, but at Xxxxx'x expense. Any recoveries
from such suit initiated by Xxxxx shall belong to Xxxxx, with
the provision that if damages are specifically allocated to
Licensee by a finder of fact or a settlement agreement, such
damages shall belong to Licensee.
b. If Xxxxx fails within a reasonable time to xxx any person for
any unfair trade practice, Licensee shall have the right to
file and maintain, at its own expense, such suits; however,
nothing in this agreement shall obligate Licensee to assume
any responsibility or liability respecting any action or
possible action for any unfair trade practices. Licensee shall
keep Xxxxx fully informed of any such suit. Xxxxx agrees to
permit the use of its name in all such suits, to execute any
necessary documents, and to do whatever necessary to assist
Licensee in such suits, but at Licensee's expense. Any
recoveries from such suit initiated by Licensee shall belong
to Licensee, with the provision that if damages are
specifically allocated to Xxxxx by a finder of fact or a
settlement agreement. such damages shall belong to Xxxxx.
6. CONFIDENTIALITY. Confidential Information received by either party from
the other, and which is identified by the disclosing party as being
confidential or proprietary, shall be held in trust and confidence by
the receiving party. The Software shall be and remain the property of
Xxxxx and shall be presumed to be Confidential Information to the
extent not disclosed in printed publications or other publicly
available documents. The existence of some information respecting the
Software in the public domain shall not be considered or offered to
establish the presence in the public domain of all of the Software.
Nothing herein shall preclude either party from disclosing information
required by governmental action, law, or regulation; however, the party
required to disclose the information shall provide the other party with
a copy of the request or demand for such information and a statement of
its intended response at least 72 hours before the information is
disclosed. The duties and obligations to maintain Confidential
Information in this paragraph shall survive any termination of this
Agreement.
7. TERMINATION.
x. Xxxxx shall have the right to terminate all rights and all
options granted to Licensee hereunder if Licensee defaults
upon any of its obligations hereunder by giving 15 days'
written notice of termination to Licensee specifying the
default(s) for which termination is noticed and the date (not
less than 15 days distant) on which termination shall be
effective; provided, however, that if Licensee shall have
cured the specified default(s) prior to the date for which
termination was noticed, such notice shall be of no force or
effect.
b. All rights and all options granted hereunder shall terminate
automatically in the event Licensee should (i) voluntarily
seek, consent to, or acquiesce in the benefit or benefits of
any Debtor Relief Law ( defined hereinafter), or (ii) become a
party to (or be made the subject of) any proceeding provided
for by any Debtor Relief Law, other than as a creditor or
claimant, that could suspend or otherwise adversely affect the
Rights (defined hereinafter) of Xxxxx granted herein (unless,
in the event such proceeding is involuntary, the petition
instituting same is dismissed within 60 days of the filing of
same). "Debtor Relief Law" means the Bankruptcy Code of the
United States of America and all other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, suspension of
payments, or similar Laws from time to time in effect
affecting the Rights of creditors generally. "Rights" means
rights, remedies, powers, and privileges. "Laws" means all
applicable statutes, laws, ordinances, regulations, orders,
writs, injunctions, or decrees of any state, commonwealth,
nation, territory, possession, county, parish, municipality,
or Tribunal. "Tribunal" means any court or governmental
department, commission, board, bureau, agency, or
instrumentality of the United States or of any state,
commonwealth, nation, territory, possession, county, parish,
or municipality, whether now or hereafter constituted and/or
existing.
c. In the event of termination of this Agreement:
1. All obligations of confidentiality shall remain in
full force and effect; and
2. Licensee shall return, deliver, and assign to Xxxxx
all written records containing know-how, notebooks,
reports, data, applications for approval, approvals,
and all writings, including magnetically recorded
writings or legible and readable copies thereof,
which relate to or describe the use or
characteristics of the Software that are in its
possession, custody, or control.
7. ASSIGNMENT. Licensee shall not assign this exclusive license, or part
with possession of any source code, without the prior written consent
of Licensee or an Agreement by the assignee to abide by the terms of
this Agreement. Licensor's rights, title and interest in and to this
Agreement may be transferred and assigned by Licensor without notice
and Licensors assignee shall have all the rights, powers, privileges
and remedies of Licensor hereunder.
8. OTHER PROVISIONS.
a. Notices. All notices, demands, requests, or other
communications required or authorized hereunder shall be
deemed given sufficiently if in writing and if personally
delivered; if sent by facsimile transmission, confirmed with a
written copy thereof sent by overnight express delivery; if
sent by registered mail or certified mail, return receipt
requested and postage prepaid; or if sent by overnight express
delivery:
If to Xxxxx, to: Xxx Xxxxx
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
If to Licensee, to: Systems Research, Inc.R. Xxxx Xxxxxxx
000 Xxxxx Xxxxx Xxxxxx #0
Xx. Xxxxxx, Xxxx 00000
or such other addresses and facsimile numbers as shall be
furnished by any party in the manner for giving notices
hereunder, and any such notice, demand, request, or other
communication shall be deemed to have been given as of the
date so delivered or sent by facsimile transmission, five days
after the date so mailed, or one day after the date so sent by
overnight delivery.
b. Entire Agreement; Modification. This Agreement and the
Schedule executed pursuant hereto constitute the entire
agreement between the parties with respect to the subject
matter hereof and supersede all prior agreements, whether
written or oral. This Agreement shall not be modified except
by a writing signed by both parties.
c. No Waiver. No waiver of any of the provisions contained in
this Agreement shall be valid unless made in writing and
executed by the waiving party. It is expressly understood that
in the event either party shall on any occasion fail to
perform any terms of this Agreement and the other party shall
not enforce that term, the failure to enforce on that occasion
shall not prevent enforcement on any other occasion. Further,
no single or partial exercise by Licensor of any right
hereunder shall preclude any further exercise thereof or the
exercise of any other right.
d. Headings. The headings of this Agreement are for convenience
only and shall not alter or otherwise affect the meaning
hereof, nor be referred to in construing this Agreement.
e. Time is of the essence of this Agreement.
f. Invalidity. If any section of this Agreement is held invalid
by any law, rule, order, regulation, or promulgation of any
government or by the final determination of any court having
competent jurisdiction, such law, rule, order, regulation,
promulgation, or determination shall have no effect outside
the jurisdiction of such government or court and shall not
affect the enforceability of any other sections not held to be
invalid, and this Agreement shall be and remain in full force
and effect as to all provisions not held to be invalid.
g. Governing Law and Venue. This Agreement, and all transactions
contemplated hereby, shall be governed by, construed and
enforced in accordance with the laws of the State of Utah. The
parties herein waive trial by jury and agree to submit to the
personal jurisdiction and venue of a court of subject matter
jurisdiction located in Salt Lake County, State of Utah.
h. Limitations Period. No action shall be entertained by any
court of competent jurisdiction if filed more than one year
subsequent to the date the cause(s) of action actually
accrued, regardless of whether damages were otherwise as of
said time calculable.
i. Attorneys' Fees. In the event that litigation or arbitration
results from or arises out of this Agreement or the
performance thereof, the parties agree that the non-prevailing
party shall reimburse the prevailing party's reasonable
attorneys' fees, court costs, and all other expenses, whether
or not taxable by the court as costs, in addition to any other
relief to which the prevailing party may be entitled.
9. OPTION TO PURCHASE AT END OF LICENSE TERM. Licensor hereby grants
Licensee an option to purchase the licensed Software at the expiration
of the term, for the consideration of $1.00. Licensee shall have sixty
days after the term of this Agreement to notify Licensor of its intent
to exercise this option to purchase. Such payment shall be made to
Licensor within 60 days of the end of the term.
The parties hereto have caused this agreement to be executed on their
behalf, or individually, effective the day and year first above written.
/s/ Xxx Xxxxx
--------------------
Xxx Xxxxx
Systems Research, Inc.
/s/ Xxxxxxx Xxxxx By: /s/ R. Xxxx Xxxxxxx
-------------------- ----------------------------
Xxxxxxx Xxxxx Its President
SCHEDULE A
1. SOFTWARE LIST.
The Software licensed hereunder is code named Quick Access. This
license, with the option to purchase, includes all rights to the source code
developed, up to and including the date of this agreement, and any and all
enhancements, improvements, modifications, and developments to the source code.
It is the intent of the parties to licensee all rights and interests either
developed or to be developed in the Software. It includes:
a. All machine code, object code or other source code that has
been developed or is developed in the future,
b. All derivative works and personal modifications,
c. All intellectual property rights,
d. All applications and custom work completed, all trade secrets,
confidential information and documentation regarding the
Software.
Initials:
Licensor RBJ
LC
Licensee DF
