License Agreement
Exhibit
10.1
License
Agreement
Agreement
dated as of the 9th day of November 2007, by and between the State Scientific
Corporation “Kiev Institute of
Automation” (GNPK”KIA”), and Ultitek, Ltd., a corporation organized in the State
of Nevada, United States of America, with an office at 000 Xxxxxx Xxxxxx,
Xxxxxxxxx Cliffs (“ULTITEK”).
1.0
The
System
1.01 The
System shall consist of certain hardware (to be selected by ULTITEK with
GNPK»KIA»’s approval) and software providing an Internet based Computer
Reservation System (CRS), Global Distribution System (GDS) and Airlines
Operations System (AOS) with the functions as listed in Exhibit A.
1.02
System
Development Timetable is annexed hereto as Exhibit B.
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2.0 Non-exclusive
License
2.01. ULTITEK
hereby grants, and GNPK»KIA» hereby accepts, a nontransferable, and
non-exclusive license to use the System and all related documentation during
the
term of this Agreement under the price and terms specified in this Agreement.
GNPK»KIA» understands that this license does not grant it any ownership right,
title, or other interest, or any security interest in any intellectual property
rights relating to the System, nor in any copy or any part of the System, other
than as specifically provided herein.
2.02
ULTITEK
also grants, and GNPK»KIA» accepts, a nontransferable, and non-exclusive license
to copy, market and distribute the System in object code form only and only
for
use with hardware approved in writing for that purpose by ULTITEK, and to
sublicense the System for that use, subject to the following:
(a) GNPK»KIA»
will make all reports and payments to ULTITEK as provided in this
License.
(b)
Copies
of
the System may be distributed to end-users only if they have executed written
end-user sublicense agreements with GNPK»KIA», which agreements are subject to
the prior written approval of ULTITEK. Each written sublicense agreement will
provide substantially the same protection of ULTITEK’s interests in the System.
A copy of each and every approved sublicense shall be sent to ULTITEK.
(c)
GNPK»KIA»
may copy for distribution to its sublicensees the user documentation.
(d) GNPK»KIA»
agrees to include version, release and serial numbers embedded in the object
code for each copy of each Software Product it produces, as instructed by
ULTITEK or as mutually agreed.
(e) GNPK»KIA»
will include copies of a notice regarding proprietary rights approved in writing
by ULTITEK in all copies of the Software that GNPK»KIA» distributes: (i)
embedded in the object code; (ii) on the title page of all documentation; (iii)
on labels attached to tape reels, diskettes and other recording media; (iv)
on
the covers for tape reels, diskettes and other recording media; and (v) on
covers and binders for all documentation. GNPK»KIA»’s performance of this
obligation is a condition of ULTITEK’s authorization of GNPK»KIA»’s distribution
of copies of the System.
2.03 Any
rights not expressly granted herein shall be reserved for ULTITEK. GNPK»KIA»
shall not have any other rights, except as specifically authorized
herein.
2.04 Source
code or other information pertaining to the logic design of the System is
specifically excluded from the license granted hereunder.
2
2.05 GNPK»KIA»'s
use of the System shall include identification of all applications by the then
current name under which ULTITEK markets the System, so that all users are
able
to identify the System by such name.
2.06 The
parties will determine whether any modifications need to be made to the System
prior to use thereof. Any modifications made by GNPK»KIA» shall become the
property of ULTITEK.
2.07 This
License is contingent on ULTITEK’s ability to obtain financing to purchase and
further develop the System, and in the event ULTITEK is unable to secure
adequate financing or for any reason the payment mechanism contemplated herein
cannot be put into place, this Agreement shall become null and
void.
3.01 ULTITEK
shall provide training and installation services in support of the installation
of the System.
3.02 ULTITEK
shall provide normal and reasonable maintenance of the System.
3.03 GNPK»KIA»
agrees to accept all upgrades in the System, as soon as ready for
installation.
4.0
Proprietary
Rights and Restrictions on Use
4.01 GNPK»KIA»
recognizes that the System and all related information, including but not
limited to any and all databases (except databases of GNPK»KIA»), updates,
improvements, modifications, enhancements, and information related to
installation of the System at the offices of GNPK»KIA», are proprietary, and
that all rights thereto, including copyright, are owned by ULTITEK. GNPK»KIA»
further acknowledges being advised that the System, including updates,
improvements, modifications, enhancements, and information related to
installation, constitutes a TRADE SECRET of ULTITEK, is protected by law, and
by
the law of patent and copyright, is valuable and confidential to ULTITEK, and
that its use and disclosure must be carefully and continuously controlled.
GNPK»KIA» agrees that the terms of this Agreement shall not be disclosed by
GNPK»KIA» to third parties without ULTITEK's prior written consent.
4.02 ULTITEK
shall at all times retain title to all the System and all related information,
including all updates, improvements, modifications and enhancements, furnished
to GNPK»KIA» hereunder.
4.03 GNPK»KIA»
shall keep each and every item of System and all related information including
any and all updates, improvements, modifications and enhancements free and
clear
of any and all claims, liens, and encumbrances attributable to the use or
possession of the System by GNPK»KIA». Any act of GNPK»KIA», whether voluntary
or involuntary, purporting to create a claim or encumbrance on any such item
shall be void.
3
4.04 The
System supplied by ULTITEK hereunder is to be used only by GNPK»KIA» and its
airline customers only for the purposes specified in this Agreement. ULTITEK
shall not be obligated to supply, purchase or lease to any sublicensee any
hardware or other equipment.
4.05 GNPK»KIA»
shall treat the System and all related information including any and all
updates, improvements, modifications and enhancements as confidential and
proprietary, and shall protect it in the same manner that it protects the
confidentiality of its own most highly confidential proprietary information.
In
perpetuity, GNPK»KIA» shall not: (i) copy or duplicate, or permit anyone else to
copy or duplicate, any of the System, whether such System is in written,
magnetic or any other form, except pursuant to reasonable backup procedures,
or
for use in Sites or applications pursuant to this Agreement, nor; (ii) provide
or make the System available to any person or entity other than employees or
agents of GNPK»KIA» who have a need to know consistent with GNPK»KIA»'s use
thereof under this Agreement, nor; (iii) create or attempt to create, or permit
others to create or attempt to create, by disassembling, reverse engineering
or
otherwise, the source programs or any part thereof from the object program
or
from other information (whether oral, written, tangible or intangible) made
available to GNPK»KIA» under this Agreement, nor; (iv) copy for its own use or
the use of others operator manuals, system reference guides, training materials
and other user-oriented materials without the prior written consent of ULTITEK.
Any copies of the System or any written materials provided with the System
shall
be kept in a secure place, under access and use restrictions satisfactory to
ULTITEK. This provision shall survive the termination of this
Agreement.
4.06 GNPK»KIA»
agrees to notify ULTITEK forthwith if it obtains information as to any
unauthorized possession, use or disclosure of any item of System by any person
or entity, and further agrees to cooperate with ULTITEK at ULTITEK's expense,
in
protecting ULTITEK's proprietary rights.
5.0
Term
5.01 GNPK»KIA»
acknowledges the high cost of the development of the System and that the only
way to recoup these costs is to enter into long term agreements. ULTITEK
acknowledges that once the System is in place, it will be very difficult and
costly for GNPK»KIA» to replace the System is in place, it will be very
difficult and costly for GNPK»KIA» to replace the System. Therefore, the parties
agree that the initial term of this Agreement shall be five years from the
date
of execution of this Agreement.
5.02 Upon
expiration, the Parties agree to continue this Agreement and shall not terminate
this Agreement unless there is an objectively commercially valid reason why
this
Agreement must be terminated and cannot instead be modified or amended. In
such
respect, the parties agree to negotiate in good faith modifications and
amendments as reasonably necessary, and in the event that termination is
necessary, either party will give the other party not less than three (3) years
(1095 days) prior written notice of termination. Until this Agreement is
actually terminated, the parties shall fulfill their obligations.
4
6.0 Fees
and
Payments
6.01
[This
section has been omitted and filed separately with the United States Securities
and Exchange Commission.]
*************OMITTED
FOR CONFIDENTIALITY PURPOSES************
6.02 GNPK»KIA»
shall pay as a fee for the license to copy, market and distribute the System,
thirty percent (30%) of all gross revenue (converted into U.S. Dollars based
on
the current exchange rate of the National Bank of Ukraine) actually received
by
GNPK»KIA» from the copying, marketing and distribution of the System to other
parties outside of the Ukraine, who are not currently customers of GNPK»KIA» (as
listed on Exhibit C, and annexed hereto).
6.03 If
there
are any additional services requested by GNPK»KIA», or additional services must
be performed due to GNPK»KIA»’s negligence, these services shall be provided at
the rates specified in Exhibit D (which rates are in U.S. Dollars). These
billing rates are fixed for twelve (12) months from date of this Agreement.
Thereafter these rates can be changed on sixty (60) days written notice to
GNPK»KIA», with the understanding that these rates will remain in effect for at
least a twelve (12) month period. Under no circumstances, will any increase
exceed twenty percent (20%) over the prior existing rates. Where travel and
lodging costs are incurred in the course of training, installation, and/or
support work for GNPK»KIA», such costs shall be in addition to all other
fees.
6.04 The
parties agree that all financial transactions between the parties shall be
in
U.S. Dollars.
7.01 ULTITEK
is, and shall be, the sole owner of all inventions, discoveries, updates,
improvements, modifications and enhancements relating to the System, whether
in
written or unwritten form and whether developed by ULTITEK or GNPK»KIA». ULTITEK
shall retain the exclusive right to reproduce, publish, patent, copyright,
sell,
license or otherwise make use of such inventions, discoveries, updates,
improvements, modifications or enhancements.
7.02 So
long
as GNPK»KIA» is current in payment of all fees, ULTITEK agrees to provide, at no
additional charge, updates to the System not later than thirty (30) days after
ULTITEK first makes same available on a formal basis to all of its
licensees.
8.0 Warranties
8.01 Any
and
all warranties provided herein are to GNPK»KIA» only and not to any other party,
including sublicensees.
8.02 ULTITEK
warrants that, to the best of its knowledge, it is either the sole owner of
the
System or has the right to sublicense the System and that there are no known
infringements or claims of infringement with respect to the patent, copyright
or
other proprietary rights of third parties.
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8.03 (1)
At
its own expense, ULTITEK shall defend, or at its option settle, any claim,
suit,
or proceeding brought against GNPK»KIA» by a third party (other than an
affiliate of GNPK»KIA») alleging that any portion of the System infringes any
patent, copyright, trade secret or other proprietary right of such third party.
(2)
ULTITEK's obligations under subsection (1) above are expressly conditioned
upon
and subject to ULTITEK having sole control of the defense and/or settlement
of
such Infringement Claim.
(3)
ULTITEK shall have no obligation to GNPK»KIA» with respect to any Infringement
Claim if such Infringement Claim is based upon (i) GNPK»KIA»'s use of the System
in a manner not expressly authorized by this Agreement, or (ii) the use of
any
version of the System other than the most recent version of the System supplied
by ULTITEK to GNPK»KIA».
8.04 ULTITEK
warrants to GNPK»KIA» only that the System shall substantially conform in all
material respects, as to all operational features, to ULTITEK's current
specifications as published in ULTITEK's documentation for the
System.
8.05
ULTITEK shall pass through to GNPK»KIA» any and all warranties that the
manufacturer of the hardware and operating system provides. At the conclusion
of
said warranties, GNPK»KIA» shall enter into a maintenance agreement with the
local representative of the manufacturer to continue to maintain the hardware
and operating system. ULTITEK warrants and represents that the System will
perform according to ULTITEK’s specifications. In the event GNPK»KIA» detects
any malfunctioning in the ULTITEK application software, it shall notify ULTITEK
within twenty-four (24) hours. ULTITEK shall commence corrective action
immediately, but not later than twenty-four (24) hours of such notice, and
shall
correct said malfunctioning as soon as reasonably practicable in accordance
with
standard international business practices. If at any time the System is not
in
working order, ULTITEK, in its sole discretion, shall allow GNPK»KIA» to use
ULTITEK’s system or a comparable system as a “backup system” by switching
Internet channels or by switching to another hardware system. This warranty
is
conditioned on GNPK»KIA» following ULTITEK’s instructions and shall remain in
effect as long as this Agreement is in effect.
THE
WARRANTIES SET FORTH IN THIS SECTION ARE IN LIEU OF ALL OTHER REPRESENTATIONS
AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY
AND
FITNESS FOR A PARTICULAR PURPOSE AND ANY OTHER STATUTORY OR COMMON-LAW WARRANTY.
ULTITEK HEREBY EXPRESSLY DISCLAIMS AND EXCLUDES ANY AND ALL SUCH OTHER
REPRESENTATIONS AND WARRANTIES. LIABILITY OF ULTITEK TO GNPK»KIA», IF ANY, FOR
BREACH OF WARRANTY ARISING OUT OF CONTRACT, NEGLIGENCE OR STRICT LIABILITY
IN
TORT, OR ANY OTHER CLAIM RELATING TO THIS AGREEMENT SHALL BE LIMITED TO THE
TOTAL AMOUNT RECEIVED DIRECTLY FROM GNPK»KIA». IN NO EVENT SHALL ULTITEK BE
LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSS OF BUSINESS OR PROFITS,
SPECIAL OR INDIRECT DAMAGES OF ANY NATURE WHATSOEVER.
6
9.0 Relationship
9.01 In
order
to permit ULTITEK to execute its obligations under the terms hereof, GNPK»KIA»
will permit ULTITEK to have reasonable access to GNPK»KIA»'s premises, computer
data, computers, and other materials necessary to the performance of this
Agreement. ULTITEK agrees that it will keep confidential and never divulge
any
knowledge or information not in the public domain which is furnished to it
by
GNPK»KIA» or of which ULTITEK becomes aware as a result of visiting the premises
of GNPK»KIA».
9.02 Each
of
ULTITEK and GNPK»KIA» will be and shall act as an independent contractor and not
as an agent or partner of, or joint venture with the other party for any purpose
and neither party by virtue of this Agreement shall have any right, power,
or
authority to act or create any obligation, express or implied, on behalf of
the
other party.
9.03 Except
as
otherwise provided herein, or as may hereafter be established by an agreement
in
writing executed by the parties hereto, all expenses incurred by each party
in
performing its obligations hereunder shall be borne by the party incurring
the
expense.
9.04 In
the
event of termination by reason of the GNPK»KIA»'s failure to comply with any
provision of this Agreement, or upon any act which shall give rise to ULTITEK's
right to terminate, ULTITEK shall have the right, at any time, to terminate
the
license and take immediate possession of the System and documentation and all
copies wherever located, without demand or notice. Within thirty (30) days
after
termination of the license, GNPK»KIA» will return to ULTITEK the System in the
form provided by ULTITEK or as modified by the GNPK»KIA», or upon request by
ULTITEK destroy the System and all copies, and certify in writing that they
have
been destroyed. Termination under this paragraph shall not relieve GNPK»KIA» of
its obligations regarding confidentiality contained in this
Agreement.
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9.05
|
ULTITEK
may assign this License to the surviving entity in a merger or
consolidation in which it participates or to a purchaser of all or
substantially all of its assets or capital stock. GNPK»KIA» may not assign
this License to anyone without the prior written consent of ULTITEK.
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|
10.0
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10.01
The
parties agree to submit disputes between them relating to this License and
its
formation, breach, performance, interpretation and application shall be finally
settled under the Rules of Arbitration of the International Chamber of Commerce
by one or more arbitrators appointed in accordance with the said
Rules.
10.02 ULTITEK
will not be required to arbitrate any dispute relating to actual or threatened
unauthorized use or disclosure of confidential information or the System or
violation of ULTITEK’s proprietary rights in the System.
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11.0
Miscellaneous.
11.01 This
License may be amended or supplemented only by a writing signed on behalf of
both parties. No purchase order, invoice, or similar form will amend this
License even if accepted by the receiving party in writing.
11.02 No
waiver
will be implied from conduct or failure to enforce rights. No waiver will be
effective unless in a writing signed on behalf of the party claimed to have
waived.
11.03 Neither
party will have the right to claim damages or to terminate this License as
a
result of the other’s failure or delay in performance due to circumstances
beyond its reasonable control, such as labor disputes, strikes, lockouts,
shortages of or inability to obtain labor, fuel, raw materials or supplies,
war,
riot, insurrection, epidemic, or act of God, not the fault of the nonperforming
party.
11.04 If
any
part of this License is found invalid or unenforceable, it will be enforced
to
the maximum extent permitted by law, and other parts of this License will remain
in force.
11.05 This
License represents the entire agreement between the parties relating to the
System and supersedes all prior representations, discussions, negotiations
and
agreements, whether written or oral. This License consists of the business
terms, these terms and conditions.
11.06 All
notices, reports, requests and other communications required or permitted
hereunder must be in writing. They will be deemed given when: (i) delivered
personally, (ii) sent by telex, (iii) sent by commercial overnight courier
with
written verification of receipt, or (iv) sent by registered or certified mail,
postage prepaid—in each case to the receiving party’s Initial Address for Notice
set forth above or to any other address that the receiving party may have
provided for purposes of notice by notice hereunder.
The
parties have caused this Agreement to be executed as of the date first above
written.
ULTITEK,
Ltd.
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By:
|
/s/
Roman Price
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|
Roman
Price,
President
|
STATE
SCIENTIFIC CORPORATION “KIEV INSTITUTE OF
AUTOMATION”
|
By:
|
/s/
Xxxxxxxxx X. Xxxxxxx
|
|
Xxxxxxxxx
X. Xxxxxxx, General
Director
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8
Exhibit
A
System
Functions
-Complete
Accounting System including but not limited to:
-
Accounts payable, accounts receivable, general ledger;
-
Inventory control – seats;
-
Inventory control – spare parts and other miscellaneous
components;
-
Maintenance;
-
Fixed
assets;
-
Purchasing;
-
Inter
airline clearing facility;
-
Airplane equipment inventory;
-
Miscellaneous supplies and logistics;
-
Travel
agency access system;
-
Reservations, sales and ticketing;
-
Internet reservation;
-
Multilingual features (English, Russian), (other languages
later-on);
-
Charter
flights control;
9
System
Development Timetable
Year
0000- Xxxxxx Xxxxxxx
-
Begin
Beta test installation at GNPK»KIA» site
Year
2009- First Quarter
-
Commence Beta test operation at GNPK»KIA» site
Year
0000- Xxxxx Xxxxxxx
-
Deliver
Release 1 of Computer Reservation System to GNPK»KIA»
-
Conduct
additional training for GNPK»KIA»
Year
2009 – Fourth Quarter
-
Deliver
Global Delivery System capabilities to GNPK»KIA»
10
Exhibit
D
ULTITEK’s
Tariffs
Time
and Material
projects
will billed $225.00 per hour with a 4 hour minimum per day at the customer
location and a 2 hour minimum at ULTITEK’s location. Overtime, over 8 hours per
day per employee, will be billed @ 150% of the standard hourly
rate.
Local
travel:
Travel
time to/from customers located more than 30 miles from the office will be
charged at 50% of the standard hourly rate.
Domestic
travel: 1
to 2
days of travel time will be added to the travel expense invoice and will be
charged at 50% of the standard hourly rate.
Foreign
travel:
2 to 3
days of travel time will be added to the travel expense invoice and will be
charged at 50% of the standard hourly rate.
Wiring:
$200.00
for each cable run (for up to 100 feet in length) inside the drywall and drop
ceiling, on a single floor including termination on both ends.
Each
additional 10 feet: $15.00. Multiple floor installations will be charged an
extra 15%. Complicated jobs will be quoted separately. The minimum charge is
for
3 cable runs for local customers and 2 days min. charge for out of town
customers.
Installation
of
any
additional equipment will be charged on a Time and Material basis.
Actual
expenses,
as
described below, will be billed to the customer as they occur.
The
company policy: each employee must use a vehicle for
transportation.
Customers
are to reimburse for parking and tolls incurred.
Customers
located more than 30 miles from our office will be billed for mileage at $0.33
per mile or whatever permitted by IRS.
Foreign
and domestic travel:
Airline
tickets: Business Class or First class, if business class is not
available.
Car
will
be rented for each two employees (Avis, Hertz or equivalent).
Ground
transportation to and from airport or an airport parking.
11
Meals,
not to exceed $150.00 per person a day.
The
invoices will include a “Statement of Work Performed” and will be mailed during
the first week of the following month for the previous month.
The
terms are: Net 15 days.
Hardware purchases and fixed price projects require a deposit, balance due
will
vary from COD to net 15, according to circumstances. For large projects and
hardware purchases deposits and progress payments may be required. Expense
invoices are COD or prepaid. Invoices must be paid on-time. If a customer is
seriously overdue, we reserve the right to decline to perform additional
services.
Overdue
invoices are subject to a late charge of $250.00 plus 1.5%
interest per month from the first date of the work performed on the “Statement
of Work Performed”, delivery date of the product or beginning of a maintenance
period.
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