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Exhibit 10.10
SOFTWARE LICENSE
SOFTWARE LICENSE (the "License") dated as of [ ], 2001, between Quality
King Distributors, Inc., a New York corporation having its executive offices at
0000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000 ("Licensor"), and QK Healthcare,
Inc., a Delaware corporation having its executive offices at 0000 Xxxxx Xxxxxx,
Xxxxxxxxxx, Xxx Xxxx 00000 ("Licensee").
WHEREAS, pursuant to that certain Agreement and Plan of Corporate
Separation, and Reorganization for QK Healthcare, Inc. of even date herewith
among Licensor, Licensee and all of the shareholders of Licensor (the
"Reorganization Agreement") Licensor and Licensee agreed to enter into this
License; and
WHEREAS, in accordance with the Reorganization Agreement, Licensor and
Licensee have entered into that certain Support Services Agreement of even date
herewith between Licensor and Licensee pursuant to which among other matters,
Licensor will provide computer services to Licensee (the "Support Services
Agreement).
NOW, THEREFORE, in consideration of the premises and the mutual
promises and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby subject to the terms and conditions set
forth herein, Licensor and Licensee agree as follows:
1. LICENSE AND SCOPE.
Subject to the terms and conditions of this License, Licensor hereby grants to
Licensee a perpetual license to use, adapt, modify and create derivative works
of certain computer software owned by Licensor and more specifically identified
in Exhibit A and all updates, modifications, enhancements and releases thereof
and manuals and documentation related thereto in connection with the
Pharmaceutical Business (as defined in that certain Indemnification,
Noncompetition and Tax Cooperation Agreement of even date herewith among
Licensor, Licensee and Pro's Choice Beauty Care, Inc., a New Jersey corporation
(the "Software"). Licensor shall not grant a license to use, adopt, modify or
create derivative works of the Software to any other person, firm, corporation,
governmental or private entity, or any other entity of any kind which is
competitive with the Pharmaceutical Business. In addition, Licensor has provided
Licensee with one copy of the source code for the Software in Licensor's control
(the "Source Code") and the manuals and documentation related thereto (the
"Documentation") of which Licensee hereby acknowledges receipt. Licensor shall
deliver one copy of all updates, modifications, enhancements and releases of the
Source Code (the "Source Code Updates") and of all manuals and documentation
related thereto (the "Documentation Updates"). Except as may be expressly set
forth in this Agreement, Licensor grants no other rights to Licensee.
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2. FEES AND PAYMENTS.
No fee will be charged by Licensor under this Agreement for the use, adaptation,
modification or creation of derivative works of the Software, Source Code,
Source Code Updates, Documentation or Documentation Updates.
Licensee is solely responsible for payment of any taxes (including sales or use
taxes, intangible taxes, and property taxes) resulting from its acceptance of
this license and possession and use of the Software, Source Code and Source Code
Updates (other than taxes arising from or relating to Licensor's revenues).
Licensee agrees to indemnify and hold Licensor harmless from all claims and
liability arising from Licensee's failure to report or pay such taxes.
3. LICENSEE'S RESPONSIBILITIES.
In the event that Licensor shall no longer provide computer services to Licensee
under the Support Services Agreement:
(a) Licensee shall be responsible for operating the Software, Source
Code and Source Code Updates on its own equipment or on the equipment
of a third party under contract to Licensee (the "Third Party
Processor") used solely for the internal needs of Licensee's business.
(b) Licensee shall be responsible for ensuring a proper environment and
proper utilities for the computer system on which the Software will
operate.
(c) Licensee shall be responsible for maintaining and supporting the
Software and hereby expressly acknowledges that Licensor will not be
providing any maintenance or support or consultative services.
(d) If Licensee installs the Software on a system operated by a Third
Party Processor, Licensee shall remain liable to Licensor for the
actions and omissions of the Third party Processor.
4. CONFIDENTIALITY.
For purposes of this License, "Confidential Information" means all information,
data and knowledge concerning the Software, the Source Code and the
Documentation, including, but not limited to, the Software, the Source Code, the
Source Code Updates, the Documentation, the Documentation Updates, trade secrets
and other proprietary ideas or confidential information respecting inventions
(whether or not patentable), patents, patent applications (under any divisions,
continuations, in-whole or in part, patents issuing thereon and issues thereof)
products, designs, sketches, plans, calculations, prototypes, models, formulas,
specifications, procedures, discoveries, improvements, charts, diagrams, graphs,
writings, methods, know-how, techniques, systems, processes, hardware, software,
firmware, code, software programs, works of authorship, records, studies, trade
practices,
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customer lists, projects, plans and proposals, whether in written, electronic,
magnetic, optical, or any other form. Licensee shall use the Confidential
Information only for maintaining and operating the Software for Licensee's
internal use and shall not use the confidential information or assist others to
use the confidential information for any other purposes and shall not publish or
otherwise disclose the Confidential Information or any part thereof to any other
person, firm or corporation; provided, however, that the obligation not to
disclose the Confidential Information shall not apply to:
(a) any of the following information: (i) information that Licensee
receives from a third party without restriction or without breach of
this License; (ii) information that is approved for release by the
written authorization of the Licensor; or (iii) information that is or
becomes publicly known other than through a knowing or wrongful act of
Licensee;
(b) to disclosures made pursuant to a subpoena or regulatory
investigative demand; provided that the party subject to such subpoena
or regulatory demand first gives reasonable notice to the other party
so that the other party may contest such subpoena or regulatory
investigative demand; and
(c) to disclosures made to legal and financial advisors on a
confidential basis.
Without limiting Licensee's general confidentiality obligations under this
Section 4, Licensee will maintain the Source Code, Source Code Updates,
Documentation and Documentation Updates in strict confidence and will disclose
the Source Code only to those employees or independent contractors of Licensee
who have a legitimate business need to access the Source Code, Source Code
Updates, Documentation and Documentation Updates for the uses permitted
hereunder. Licensee will cause such employees or third parties, prior to being
allowed access to the Source Code, Source Code Updates, Documentation and
Documentation Updates, to be advised of the confidential nature of the Source
Code, Source Code Updates, Documentation and Documentation Updates and to have
or sign a non-disclosure agreement with restrictions at least as favorable to
Licensor as those contained in this Agreement.
5. PROPRIETARY PROTECTION AND RESTRICTIONS ON SOFTWARE.
Licensor shall have and retain sole and exclusive ownership of all right, title,
and interest in and to the Software, the Documentation and the Documentation
Updates and all modifications and enhancements thereof made by or on behalf of
Licensor (including ownership of all trade secrets and copyrights pertaining
thereto), subject only to the rights and privileges expressly granted to
Licensee herein by Licensor. Any such modifications and enhancements of the
Software shall be included in the "Software" for purposes of this Agreement.
This License does not provide Licensee with title or ownership of the Software,
but only a right of limited use. Licensee must keep the Software free and clear
of all claims or encumbrances other than those caused by Licensor.
Licensee shall have and retain sole and exclusive ownership of all right, title
and interest in and to all adaptations of, modifications to and derivative works
of the Software, the Source Code, the Source Code
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Updates, the Documentation and Documentation Updates made by or on behalf of
Licensee (including ownership of all trade secrets and copyrights pertaining
thereto).
Licensee may not distribute the Software, the Source Code, the Source Code
Updates, the Documentation or the Documentation Updates, (electronically or
otherwise), or any copy, adaptation, transcription, or merged portion thereof,
made by or on behalf of Licensor except as expressly authorized by Licensor or
permitted hereunder. except as expressly permitted in this License, Licensee
will not be permitted to license, sublicense, assign, sell or transfer any
rights relating to the Source Code and Source Code Updates to any other party,
use the Source Code, Source Code Updates, Documentation, Documentation Updates
or the Software for the benefit of any third party, or allow any third party
access to or use of the Software. No service bureau work, multiple-user license,
or time-sharing arrangement is permitted.
Notwithstanding anything to be contrary on this Section 5, the following events
shall not constitute a impermissible transfer, lease sublicense or assignment of
the Software or this Agreement: (i) a change in the person or persons who
control the voting stock of the Licensee, (ii) the acquisition of all or
substantially all the assets of Licensee or of Licensee's Pharmaceutical
Business; provided that following such transaction the Software is used solely
in connection with the Pharmaceutical Business and in accordance with the terms
and provisions hereof and any transferee or assignee of the Software agrees in
writing to be bound hereby and (iii) the pledge of the License as security for
the Licensee's payment and performance of its obligations under loan documents
with Licensee's lenders.
6. USE OF SOFTWARE AFTER TERMINATION OF SUPPORT SERVICES AGREEMENT.
In the event that Licensor shall no longer provide computer services to Licensee
under the Support Services Agreement, subject to Section 3 hereof, for the
purposes of serving only the internal needs of Licensee's Pharmaceutical
Business:
(a) Licensee may install and use the Software in Licensee's own
facilities or on a computer system maintained by a Third Party
Processor;
(b) Licensee or a Third Party Processor may use the Source Code and
Source Code Updates to maintain the Software;
(c) Licensee may license the Software, Source Code, Source Code
Updates, Documentation and Documentation Updates to a Third Party
Processor.
(d) Before delivering the Software, Source Code, Source Code Updates,
Documentation or Documentation Updates to a Third party Processor,
Licensee shall obtain from the third party processor an agreement in
form reasonably satisfactory to Licensor that the Third party Processor
will observe the terms of this Agreement, including, without
limitation, the restrictions on use that are contained herein.
7. NO WARRANTY AND LIMITATION OF LIABILITY.
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THE SOFTWARE, THE SOURCE CODE AND THE DOCUMENTATION ARE, AND THE SOURCE CODE
UPDATES AND DOCUMENTATION UPDATES WILL BE, PROVIDED "AS IS" AND "WHERE IS".
EXCEPT AS PROVIDED IN SECTION 8, LICENSOR DISCLAIMS ANY AND ALL PROMISES,
REPRESENTATIONS, WARRANTIES AND CONDITIONS WITH RESPECT THERETO, INCLUDING,
WITHOUT LIMITATION, ITS CONDITION, ITS CONFORMITY TO ANY REPRESENTATION OR
DESCRIPTION, THE RESULTS OF ITS OPERATION, THE EXISTENCE OF ANY LATENT OR PATENT
DEFECTS, ANY NEGLIGENCE, AND WARRANTIES OF NONINFRINGEMENT, OWNERSHIP,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE.
Except pursuant to the Support Services Agreement, Licensor shall not be
obligated to correct, cure, or otherwise remedy any nonconformity or defect in
the Software or Source Code.
8. REPRESENTATIONS, WARRANTIES AND INDEMNITY.
Licensor represents that the Software substantially conforms to the description
in the Source Code and the Documentation and that the Software as modified by
any Source Code Updates will conform to the description in the Source Code as
updated by the Source Code Updates and the Documentation, as modified by the
Documentation Updates. Licensor further represents that Licensee's use of the
Software, Documentation, Documentation Updates, Source Code and Source Code
Updates, if used pursuant to the terms of this Agreement, will not constitute an
infringement or other violation of the United States copyright, patent, trade
secret or other property rights of any third party.
Licensor shall defend, indemnify and hold harmless Licensee, its affiliates, and
the officers, directors, employees and agents of each of them, from and against
any and all claims, damages, losses, expenses (including reasonable attorneys'
fees), demands, actions, and causes of action arising out of or resulting from
any (i) breach of any term of this Agreement by Licensor; (ii) any claim of any
nature whatsoever brought by any third person or entity who allegedly suffers
damage of any type as a result of Licensee's use of the Software unless arising
as the result of any adaptation, modification or creation of derivative work of
the Software made or undertaken at the direction of Licensee; or (iii) any claim
of infringement of any copyright, patent or trade secret or other proprietary
rights arising from the use of the Software, Source Code, Source Code Updates,
Documentation or Documentation Updates. Licensor shall, at Licensee's request,
defend any action, claim or suit asserting a claim covered by this indemnity. In
each case, Licensee must promptly notify Licensor in writing of any such claim
(but failure to so notify will not relieve the Licensor of its indemnification
obligation hereunder except to the extent that Licensor is materially prejudiced
by such failure), and Licensor shall be permitted to fully control the defense
and any settlement of such claim. However, Licensor shall not, without
Licensee's written consent, settle any such claim if such settlement arises from
or is part of any criminal action, suit or proceeding or contains a stipulation
to or admission or acknowledgment of, any liability or wrongdoing (whether in
contract, tort or otherwise) on the part of Licensee or any of Licensor's
affiliates. Licensee shall cooperate fully in the defense of each such claim
(except to the extent that any action would, in the reasonable
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judgment of Licensee, cause Licensee to jeopardize or lose the protection of
attorney-client or other privilege) and may appear at its own expense through
counsel.
Licensee shall defend, indemnify and hold harmless Licensor its affiliates, and
the officers, directors, employees and agents of each of them, from and against
any and all claims, damages, losses, expenses (including reasonable attorneys'
fees), demands, actions, and causes of action arising out of or resulting from
any (i) breach of any term of this Agreement by Licensee; (ii) any claim of any
nature whatsoever brought by any third person or entity who allegedly suffers
damage of any type as a result of Licensee's use of the Software other than as
contemplated hereby or arising as the result of any adaptation, modification or
creation of derivative work of the Software made or undertaken at the direction
of Licensee; or (iii) any claim of infringement of any copyright, patent or
trade secret or other proprietary rights arising from any modification,
enhancement or use not contemplated hereby of the Software by Licensee. Licensee
shall, at Licensor's request, defend any action, claim or suit asserting a claim
covered by this indemnity. In each case, Licensor must promptly notify Licensee
in writing of any such claim, and Licensee shall be permitted to fully control
the defense and any settlement of such claim. However, Licensee shall not,
without Licensor's written consent, settle any such claim if such settlement
arises from or is part of any criminal action, suit or proceeding or contains a
stipulation to or admission or acknowledgment of, any liability or wrongdoing
(whether in contract, tort or otherwise) on the part of Licensor or any of
Licensee's affiliates. Licensor shall cooperate fully in the defense of each
such claim and may appear at its own expense through counsel.
9. TERM OF LICENSE; TERMINATION.
Licensee's license to use the Software in accordance with the terms and
provisions hereof shall become effective upon the date hereof and shall continue
in perpetuity.
Licensor may terminate this License upon a material breach by Licensee which is
not cured by Licensee within ninety (90) days following receipt by Licensee of
written notice from Licensor of such breach. Licensee may terminate this License
at any time upon written notice to Licensor.
Upon termination of this License, all rights granted to Licensee will terminate
and revert to Licensor. Promptly upon termination of this License for any reason
or upon discontinuance or abandonment of Licensee's possession or use of the
Software, Source Code, Source Code Updates, Documentation and/or Documentation
Updates, Licensee must return or destroy, as requested by Licensor, all copies
of the Software, Source Code, Source Code Updates, Documentation and
Documentation Updates in Licensee's possession (whether modified or unmodified),
and all other materials pertaining to the Software, Source Code, Source Code
Updates, Documentation and Documentation Updates (including all copies thereof)
that are in Licensee's possession or control. Licensee agrees to certify
Licensee's compliance with such restriction upon Licensor's request.
10. MISCELLANEOUS.
(a) This License shall be governed by and construed in accordance with
the laws of the State of New York.
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(b) No modification of this License shall be binding unless it is in
writing and is signed by an authorized representative of the party
against whom enforcement of the modification is sought and, in the case
of the Licensee, such modification shall have been consented to by the
independent directors of Licensee (a director shall be deemed to be an
"independent director" if he or she satisfies the requirement of
independence set forth in the current rules of the New York Stock
Exchange).
(c) Any notices required or permitted under this License shall be in
writing and delivered in person or sent by registered or certified
mail, return receipt requested, with proper postage affixed.
(d) In the event that any of the terms of this License is or becomes or
is declared to be invalid or void by any court or tribunal of competent
jurisdiction, such term or terms shall be null and void and shall be
deemed severed from this License and all the remaining terms of this
License shall remain in full force and effect.
(e) All headings in this License are solely for convenience and shall
not be considered in interpreting this License.
(f) THIS LICENSE IS THE COMPLETE AND EXCLUSIVE STATEMENT OF LICENSOR'S
OBLIGATIONS AND RESPONSIBILITIES TO LICENSEE WITH REGARD TO THE
SOFTWARE AND SUPERSEDES ANY OTHER PROPOSAL, REPRESENTATION, OR OTHER
COMMUNICATION BY OR ON BEHALF OF LICENSOR RELATING TO THE SUBJECT
MATTER HEREOF.
QK HEALTHCARE, INC. QUALITY KING DISTRIBUTORS, INC.
By: _______________________________ By: ______________________________
Name: _____________________________ Name: ____________________________
Title: ____________________________ Title: ___________________________
Date: _____________________________ Date: ____________________________
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EXHIBIT A
Licensed Software
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