Exhibit 10.2
EXCLUSIVE LICENSE AGREEMENT
This Exclusive License Agreement (this "Agreement") is made as of the 15th
day of October, 1997, by and between Capital Development Group, Inc., an Oregon
corporation ("CDG"), Xxxxxxx Xxxx ("Xxxx"), and Aries Financial Corporation, an
Oregon corporation ("Aries").
BACKGROUND
Vahl and CDG have created certain computer software and related
documentation to organize and expedite the factoring, processing, servicing,
collection and rating of medical accounts receivable ("Administrator I"). Aries
has been formed to engage in the business of factoring medical accounts
receivable and wishes to license Administrator I from Vahl and CDG on an
exclusive basis. Vahl and CDG are willing to exclusively license Administrator I
to Aries on the terms and conditions contained in this Agreement. Therefore, the
parties agree as follows:
AGREEMENT
1. Definitions. The following terms shall have the following meanings for
purposes of this Agreement.
1.1 "Confidential Information" includes each of the following: (a) the
Core Concepts; (b) the Customer Data; and (c) any information designated by the
disclosing party as confidential in writing or, if disclosed orally, designated
as confidential at the time of disclosure and reduced to writing and designated
as confidential in writing within thirty (30) days after disclosure.
Notwithstanding the foregoing, "Confidential Information" will not include
information that: (aa) is or becomes generally known or available by
publication, commercial use or otherwise through no fault of the receiving
party; (bb) is known by the receiving party at the time of disclosure and is not
subject to restriction; (cc) is independently developed by the receiving party
without use of the disclosing party's Confidential Information; (dd) is lawfully
obtained from a third party who has the right to make such disclosure; or (ee)
is released in writing for publication by the disclosing party.
1.2 "Consulting Fees" means the fees to be paid by Aries to Vahl in
exchange for the Services. The Consulting Fees are more thoroughly described in
the Statement of Work.
1.3 "Core Concepts" means any design concepts, code, ideas,
algorithms, procedures, processes, principles, know-how, and methods of
operation underlying Administrator I.
1.4 "Customer" means a customer of Aries to whom Aries
provides factoring services.
1.5 "Customer Data" means all files, data and other information
relating to any Customer that is provided to Vahl or CDG by Aries or any
Customer. All Customer Data is, and shall remain, the sole and exclusive
property of Aries and/or the Customer.
1.6 "Deliverables" means the source code for Administrator I, together
with all other documentation relating to or constituting the Core Concepts.
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1.7 "Escrow Agent" means Xxxxx Xxxxxx Xxxxxxxx, L.L.P., who shall hold
the Shares for distribution to CDG shareholders, subject to the provisions of
Section 5 of this Agreement.
1.8 "License" means the worldwide, exclusive license to use and/or
sublicense Administrator I, including, but not limited to, a license of the Core
Concepts and a license of any copyrights in Administrator I and/or the Core
Concepts. Notwithstanding the exclusivity of the License, Aries understands and
acknowledges that CDG has granted to MEDCAP a non-exclusive license to use
Administrator I, and that such license shall not be interrupted or otherwise
affected by this Agreement.
1.9 "License Fee" means the one-time fee paid to CDG by Aries as
partial compensation for the License.
1.10 "Services" means the services to be performed by Vahl described
in the Statement of Work.
1.11 "Shares" means the shares of common stock of Apollo Financial
Group, Inc., an Oregon corporation, to be delivered by Aries to certain
shareholders of CDG as partial compensation for License. The number of Shares,
which shall be equal to the number of shares of common stock (measured on an
as-converted basis) held by CDG shareholders who paid cash for their CDG shares,
and the recipients of the Shares, are fully described in Attachment B.
1.12 "Statement of Work" means Attachment A, attached hereto and
incorporated herein by this reference.
2. Vahl Services. In exchange for the Consulting Fees, Vahl shall perform
for Aries the Services.
3. License of Administrator I. In exchange for the License Fee and the
Shares, CDG and Vahl shall grant to Aries the License. The License shall be
perpetual unless Aries materially breaches its obligations under this Agreement,
in which case CDG and Vahl may, upon written notice to Aries, terminate the
License.
4. Payment and Delivery.
4.1 As consideration for the License, and upon delivery of the
Deliverables by CDG and Vahl, Aries shall pay CDG a one-time License Fee of
$100,000, and shall deliver the Shares as described in Section 5 below.
4.2 As consideration for the Services, Aries will pay Vahl the
Consulting Fees, as well as reasonable out of pocket expenses, at the times and
in the manner described in the Statement of Work. Late payments will bear
interest at the rate of 1.5% per month (but not to exceed the maximum allowed by
law) on the delinquent amount from the due date until the date of payment.
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5. Delivery of Shares. Upon delivery to Aries of the Deliverables, Aries
shall deliver to the Escrow Agent certificates representing the Shares, to be
held by the Escrow Agent until the earlier of (a) Aries' delivery to the Escrow
Agent of written confirmation that Administrator I and its accompanying
documentation perform in accordance with the warranties set forth in Section 9
of this Agreement, or (b) December 15, 1997, at which time the Escrow Agent
shall deliver the Shares to the shareholders of CDG, in amount and to the
persons listed on Attachment B. If, prior to December 15, 1997, Aries notifies
the Escrow Agent in writing, with copy to CDG, that Administrator I does not
perform in accordance with the warranties set forth in Section 9 of this
Agreement, and if CDG, within thirty (30) days thereafter, delivers to the
Escrow Agent a notice of its intent to invoke the dispute resolution procedures
set forth in Section 14 of this Agreement, then the Escrow Agent shall hold the
Shares until the selection of an arbitrator, at which time the Escrow Agent
shall deliver the Shares to the arbitrator. If CDG does not respond to Aries'
notice within thirty days, then the Escrow Agent shall return the Shares to
Aries.
6. Title. In addition to being the exclusive licensee of Administrator I,
Aries shall also be the sole owner of any modifications, enhancements or
derivatives of Administrator I that are developed by or on behalf of Aries.
Aries shall be entitled to use and/or sublicense any of the Core Concepts
without restrictions, but Vahl is, and shall remain, the owner of the Core
Concepts.
7. Cooperation by Aries. Aries acknowledges that successful performance of
the Services by Vahl is dependent on the cooperation of Aries and Customer;
therefore, as more fully described in the Statement of Work, Aries shall (a)
provide or cause to be provided to Vahl in a timely manner any information
reasonably requested by Vahl; (b) designate the liaisons between Aries and Vahl
who shall perform Aries' responsibilities and assure performance of Customers'
responsibilities; (c) perform any other functions and provide any other
resources as may reasonably be requested by Vahl.
8. Modifications. Aries may at any time during the term of this Agreement
make modifications, changes or enhancements to Administrator I, and such
modifications, changes or enhancements shall be owned by Aries. Aries may also
prepare and submit to Vahl a request for supplemental Services, which may
involve modifications, changes or enhancements to Administrator I. Requests for
supplemental Services shall be submitted to Vahl by Aries in writing or
confirmed by Vahl in writing. Vahl's response, which shall be provided in
writing within 30 days after receipt of Aries' request, shall state whether Vahl
is willing to perform the supplemental Services, and the amount of any
supplemental fees that Vahl would charge to perform such supplemental Services.
If Aries elects to proceed with the modifications, Vahl and Aries shall execute
a supplemental Statement of Work that describes in detail the supplemental
Services and the supplemental fees.
9. Warranties. CDG and Vahl represent and warrant to Aries that
Administrator I will contain all elements and documentation, and shall perform
as well, as the software that was beta tested and certified in 1994. CDG and
Vahl further represent and warrant that the Deliverables will contain all source
code and other documentation necessary to operate Administrator I on properly
equipped hardware. EXCEPT AS SET FORTH IN THIS SECTION, CDG AND VAHL MAKE NO
WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO ADMINISTRATOR I. CDG AND VAHL
HEREBY EXCLUDE ANY WARRANTY OF MERCHANTABILITY OR
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FITNESS FOR A PARTICULAR PURPOSE. ARIES ACKNOWLEDGES THAT, EXCEPT FOR THE
EXPRESS WARRANTY SET FORTH IN THIS PARAGRAPH, IT IS PURCHASING ADMINISTRATOR I
"AS IS."
10. Limitation of Remedies. In the event that Administrator I does not
perform in accordance with the warranty set forth in Section 9 above, Aries'
sole remedy shall be against CDG for a return of the Shares and the License Fee.
Aries understands and acknowledges that Vahl is not receiving any portion of the
License Fee or Shares, and, as such, shall have no liability to Aries for any
claim related to Administrator I. Aries hereby covenants on behalf of itself and
anyone claiming through Aries, not to assert any claims against Vahl that in any
way relate to Administrator I.
11. Confidential Information. In order to protect Aries' License in
Administrator I, and in order to protect Vahl's rights to the Core Concepts,
neither party will disclose to any person any Confidential Information of the
other party without the prior written consent of the other party, nor will
either party use Confidential Information of the other party for purposes other
than those necessary to directly further the purposes of this Agreement. Each
party agrees to safeguard the confidentiality of the other party's Confidential
Information.
12. Term and Termination. With respect to the Services to be performed by
Vahl, this Agreement shall continue until the completion of the Services and the
payment of the Consulting Fees. With respect to the License, this Agreement
shall continue in perpetuity, except that either party may terminate this
Agreement immediately if the other party becomes subject to a bankruptcy
proceeding or similar proceeding that is not dismissed within 60 days after
filing or if the other party commits a material default in the timely
performance of its obligations under this Agreement and (a) in the case of a
payment default, fails to cure the default within 10 days after notice from the
non-defaulting party, or (b) in the case of any other default, fails to fully
cure the default within 30 days after notice from the non-defaulting party, or
(c) in the case of a default that cannot reasonably be cured within 30 days
(which shall not include payment defaults), fails to commence and diligently
pursue to completion efforts to cure the default.
13. Force Majeur. No party shall be liable for failure to perform or delay
in performing any obligation (other than the payment of money) under this
Agreement if such failure or delay is due to any cause beyond the reasonable
control of such party.
14. Disputes. If any controversy arises under this Agreement, and if CDG
and Aries do not resolve the controversy within 30 days after one party gives
the other party written notice of the controversy, the dispute shall be resolved
at the request of either party exclusively through final and binding
arbitration. The arbitration shall be conducted by a single arbitrator in
Portland, Oregon, in accordance with the then-current rules for commercial
arbitration of the Arbitration Service of Portland, Inc. The decision of the
arbitrator may be enforced in any court of competent jurisdiction. All fees or
charges of the arbitration service and the reasonable attorney fees and costs
incurred by the prevailing party in the arbitration shall be paid by the
nonprevailing party, which fees and costs shall be set by the arbitrator.
15. Waiver. Failure to insist upon strict compliance with any of the terms,
covenants, or
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conditions of this Agreement shall not be deemed a waiver of the term, covenant,
or condition, which shall continue and remain in full force and effect, nor
shall any waiver or relinquishment of any right or power at any one time be
deemed a waiver or relinquishment of the right or power at any other time.
16. Governing Law. This Agreement shall be governed by the laws of the
State of Oregon, and the copyright, patent, and trademark laws of the United
States.
17. Attorney Fees. In the event that a dispute arises under this Agreement
or directly or indirectly out of this Agreement, and if arbitration, suit, or
action is instituted to enforce or interpret the terms of this Agreement, the
prevailing party in the arbitration, suit, or action, or on the appeal of such
arbitration, suit or action, shall be entitled to an award of their reasonable
attorney fees, as set by the arbitrator, court, or appeal court, and their
costs, including reasonable attorney fees and costs in collection of any
judgment.
18. Counterparts. This Agreement may be executed in counterparts and in
multiple originals. A photocopy of this Agreement once executed shall be
effective as an original if any original is unavailable.
19. Notices. Any and all notices or other communications required or
permitted by this Agreement or by law to be served on or given to any party
shall be in writing and shall be deemed served and given when personally
delivered to the parties to whom it is directed, or in lieu of such personal
services, three days after deposit in the United States mail, postage prepaid,
registered mail, return receipt requested, sent to the addresses set forth below
the signatures on this Agreement or such other addresses as any party may
require upon notice.
20. Incorporation of Attachments. All attachments are hereby incorporated
by reference into this Agreement, including the following:
Attachment A - Statement of Work
Attachment B - Distribution List for Shares
The parties have executed this Agreement as of the date set forth in the opening
paragraph.
Capital Development Group, Inc.
By:
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Printed Name:
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Title:
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Notice Address:
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Aries Financial Corporation
By:
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Printed Name:
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Title:
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Notice Address:
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STATEMENT OF WORK
Services to include:
o Assignment and transition of contractual relationship between CDG and
Zebec Data Systems ("Zebec"), which shall include access to Zebec's associated
Medtrax database, Znet database and related systems
o Other duties as reasonably requested by Aries that are consistent with
the purposes of this Agreement
o Aries shall reimburse Vahl for time incurred in performing services under
this Agreement at the rate of $75 per hour.
o Aries shall pay or reimburse Vahl for all expenses reasonably incurred by
Vahl in connection with the performance of the Services.
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