NON-EXCLUSIVE SOURCE CODE AGREEMENT Between CATUITY INC., a Delaware Corporation and ORIGINAL INK LLC, a Virginia limited liability company
NON-EXCLUSIVE
SOURCE CODE AGREEMENT
Between
CATUITY
INC., a Delaware Corporation
and
ORIGINAL
INK LLC, a Virginia limited liability company
This
Unlimited, Non-Exclusive Source Code License Agreement (“the Agreement”) is made
and entered into as of 31 October 2007 by and between Catuity Inc, a Delaware
Corporation (“Catuity”), and Original Ink LLC, a Virginia Limited Liability
company (“Original Ink”).
RECITALS
Original
Ink is owned and controlled by Xxxxxx X. (Xxxx) Xxxxxx, a resident of the
Commonwealth of Virginia and an executive and director of Catuity
Inc.
Catuity
desires to grant a license in its software and source code commonly known as
the
Catuity Advanced Loyalty System and Original Ink desires the right to use,
modify and license, sell or otherwise transfer the software and source code
for
his own business purposes under the terms and conditions set forth in this
Agreement.
The
Board
of Directors of ratified, confirmed, and approved the grant of license to
Original Ink pursuant to the terms of this Agreement.
NOW,
THEREFORE, for an in consideration of the foregoing Recitals, the mutual
covenants and agreements set forth below and other good and valuable
consideration, the receipt and adequacy of which are acknowledged, the parties
agree to as follows:
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I.
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NON-EXCLUSIVE
LICENSE TO THE SOFTWARE
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1.1 Non-Exclusive
License of Software.
Catuity
hereby acknowledges and agrees that Original Ink has and is hereby granted
a
world-wide, paid-up, perpetual, royalty-free, non-exclusive, transferable
license to use, modify, alter, enhance, sublicense, and distribute, and create
derivative works of the Software. This license is and shall be unlimited in
scope and use, and includes, but is not limited to, (i) the right of Original
Ink to use the Software in its own internal data processing operations, wherever
located and without respect to the type or machine class of hardware used,
(ii)
to make an unlimited number of copies of the Software, and (iii) the unlimited
and unrestricted right to license and sublicense and distribute any and all
present and future versions of the Software. Original Ink shall own all right,
title and interest in and to all modifications, alterations, enhancements and
derivative works of the Software and no license to any such modification,
alterations, enhancements and derivative works are granted to
Catuity.
a. The
license acknowledged and granted hereunder includes the right to allow third
party maintenance vendors of Original Ink, as well as third party maintenance
vendors of any party granted a sublicense of the Software, to use the Software
in connection with performing maintenance or technical support or services
of
any sort or description.
b. All
sublicenses of the Software granted by Original Ink may be on such terms and
conditions as Original Ink shall in its sole discretion determine necessary
or
proper. Original Ink will be under no duty to report to or notify Catuity of
any
such grant of a sublicense nor to disclose the terms of any such
sublicense.
c. The
license hereby acknowledged and granted is a license to use, modify, alter,
enhance, and create derivative works of the source code of the Software.
Original Ink has and shall have the right to contract with any third party
to
assist it in the modification, alteration, and enhancement of the Software
and
in the creation of derivative works of the Software. Original Ink has and shall
have all right title and interest in and ownership of any such modifications,
alterations, enhancements, and derivative works and all copyrights therein
without the payment of any amount, fee, additional payment, or royalty.
d. In
addition to using the Software for Original Ink’s own internal data processing
operations, the license acknowledged and granted hereunder is a license for
use
of the Software for commercial time-sharing arrangements and for providing
service bureau, data processing, rental, and other services to third parties.
e. The
license acknowledged and granted hereunder shall include the right to sublicense
and package the Software to third parties in conjunction with any Original
Ink
product. Original Ink may also appoint third parties to sell or license the
Software on its behalf.
1.2 Exclusions.
Catuity
retains the right to license, sell or otherwise transfer its Software to other
third parties.
LICENSE
FEE
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2.1
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License
Fee.
Catuity hereby acknowledges receipt of the one-time license fee of
$10,000
for the grant of license hereunder.
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2.2
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Royalties.
For
a period of three years, Catuity will be entitled to 1% of licensing
revenue generated by the licensee or successor licensee. Payment
shall be
made on a quarterly basis and Catuity shall have access to the books
and
records of the licensee in order to determine compliance with this
royalty.
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REPRESENTATIONS
AND WARRANTIES
Both
parties to this Agreement provide the following mutual representations and
warranties as of the date of this Agreement:
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3.1
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Power
and Authority.
Both parties have all requisite power and authority to enter into
this
Agreement and to consummate this Agreement, and to carry out and
perform
all terms and conditions of this Agreement. Catuity warrants that
it knows
of no claims or encumbrances against all or part of the software
included
under this agreement.
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3.2
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Consents.
No consent, approval, or authorization of, designation, declaration
or
filing with any governmental agency or any lender, lessor, creditor,
landlord or other person is required in connection with the execution,
delivery, performance of or compliance with this Agreement and the
transaction contemplated in this
Agreement.
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3.3
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Non-Contravention.
Neither the execution, delivery, performance of or compliance with
this
Agreement, no any other action contemplated by this Agreement or
such
other agreements, will (i) violate, conflict with, or constitute
a default
or breach under the governing documents of either party; (ii) constitute
a
violation by Catuity of any requirement of law; or (iii) result,
or with
the passage of time will result, in any breach or violation of, or
be in
conflict with, or constitute a default, or give to any person any
rights
of termination or cancellation of, or accelerate the performance
required
by or maturity of, any contract or any other document or instrument
binding on or affecting either
party.
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3.4
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Costs
of the Agreement.
Each party is responsible for its own costs in connection with the
preparation and execution of this
Agreement.
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3.5
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No
Time Bombs, Etc.
Catuity warrants that the Software will be free of item such as “time
bombs,” “logic bombs”, “computer viruses”, “worms”, or any intentionally
implanted devices of a like or similar nature which might detrimentally
affect the functionality or operation of the
Software.
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3.6
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Post-Effective
Date Covenants.
Neither party will take any actions after the Effective Date that
will
materially alter the benefit received by the
other.
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3.7
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Title
to Software.
Catuity warrants that it owns all right, title, and interest in an
to the
Software free of all liens, claims, encumbrances, and
licenses.
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DELIVERIES
4.1
Catuity
Deliveries.
Promptly following execution of this Agreement, Catuity shall deliver or cause
to be executed or delivered a complete copy of Version 4.5 of all components
of
the Software, the Source of which shall be in electronic format.
INDEMNIFICATION
5.1
Indemnification.
Both
parties agree to indemnify, defend and hold harmless the other party from and
against any and all claims, damages, liabilities, losses and expenses (“Losses”)
caused by, arising out of or relating to:
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(a)
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any
misrepresentation or breach of any representation, warranty, covenant
or
agreement contained in this Agreement or in any agreement or instrument
executed and delivered or provided or caused to be provided by or
on
behalf of either party or in connection with the transactions and
transfers contemplated by this Agreement;
and
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(b)
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any
and all actions, suits, proceedings, demands, assessments, judgments,
cost
and expenses, including actual attorneys’ fees, incidental to any of the
foregoing.
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5.2
Notice.
Within
sixty (60) days after learning of the assertion of any claim against which
either party claims indemnification (“Indemnitee”) pursuant to this Article 5,
Indemnitee will notify the other party (“Indemnitor”) and afford Indemnitor the
opportunity to assume the defense or settlement of such claim at Indemnitor’s
own expense with counsel of Indemnitor’s choosing. If Indemnitee fails to notify
Indemnitor within the prescribed period, then the Indemnitor will be relieved
of
its indemnity obligations.
5.3
Remedial
Action.
The
parties shall each use reasonable efforts to minimize the obligation of the
other to indemnify by, among other reasonable things and without limiting the
generality of the foregoing, taking such reasonable remedial action as it
believes may minimize such obligation and seeking to the maximum extent possible
reimbursement from insurance carriers under applicable insurance policies
covering any such liability.
5.4
Assignment
of Claims.
The
Parties agree that upon satisfaction of the obligation to indemnify, they will
assign to the Indemnitor any and all claims, cause of action and demands of
whatever kind and nature which Indemnitee may have against any person, firm
or
other entity giving rise to the indemnified loss, and to reasonably cooperate
in
any efforts to recover from such person or entity.
TERMINATION
6.1
Termination.
This
agreement may not be terminated.
MISCELLANEOUS
7.1
Governing
Law.
This
Agreement will be governed by and construed in accordance with the laws of
the
Commonwealth of Virginia. Both parties consent to the jurisdiction and venue
of
the state or federal courts in Albemarle County, Virginia or the City of
Charlottesville, Virginia.
7.2
Payment
of Expenses.
Each
party will pay all fees and expenses, including legal and accounting fees,
incurred by it in connection with the transaction contemplated in this
Agreement.
7.3
Entire
Agreement.
This
Agreement and all other documents and instruments delivered pursuant to this
Agreement constitute the full and entire understanding and agreement between
the
parties with respect to the contemplated transaction and supersede all related
prior understandings, agreements or letters of intent.
7.4
Benefit.
This
Agreement will be binding upon and inure to the benefit of Catuity and Original
Ink, or his designee, and their permitted successors and assigns.
7.5
Amendments.
Any
modification or amendment to this Agreement will be effective only if in writing
and executed by both parties to this Agreement.
7.6
Waiver.
Waiver
by any party of any breach of any provision of this Agreement will not operate
or be construed as a waiver of any subsequent or similar breach.
7.7
Notices.
Any and
all notices, requests, demands and other communications permitted under or
required pursuant to this Agreement shall be in writing and shall be deemed
given if delivered, either physically or electronically, including fax or email,
to the parties at the addresses set forth below, or at such other addresses
as
they may indicate by written notice given as provided in this
Section:
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If
to Catuity:
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If
to Original Ink
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Original
Ink LLC
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000
Xxxxxx Xxxxx
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Xxxxxxxxxxxxxxx,
XX 00000
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Xxxxxxxxxxxxxxx,
XX 00000
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7.8
Severability.
If any
provision of this Agreement or any agreement or instrument executed in
connection with this Agreement is determined to be invalid, illegal or
unenforceable, such provision shall be enforced to the fullest extent permitted
by applicable law, and the validity, legality and enforceability of the
remaining provisions will not in any way be affected or impaired.
7.9
Construction.
Catuity
and Original Ink, or his designee, acknowledge and agree that each of them
has
equally participated in the final wording of this Agreement and this Agreement
will be construed equally against each party.
7.10
Counterparts.
This
Agreement may be executed in counterparts, each of which will be deemed an
original and all of which together will be considered one and the same
agreement. This Agreement may be signed by facsimile or PDF signature and any
facsimile or PDF signature shall be deemed an original.
7.11
No
Third Party Beneficiary Rights.
This
Agreement is not intended to and will not benefit any Persons other than Catuity
and Original Ink, or his designee, and will not create any third party
beneficiary rights in any Person.
7.12
Confidentiality.
The
parties agree to keep in strict confidence the fact of and the content of this
Agreement.
DEFINITIONS
8.1
Agreement
means
this non-exclusive source code license agreement, including all
schedules.
8.2
7
Software
means
all
right, title and interest in and to the Catuity loyalty and stored value
software product version 4.5 in Source Code format, including terminal
applications and APIs as described in the attached product descriptions
circulated in the U.S. by Catuity, a documentation, including data security
practices, policies and procedures and support materials, and any proprietary
compliers used with respect to such software product
8.3
Effective
Date
has the
meaning set forth in the first paragraph of this Agreement.
8.4
Excluded
Software
has the
meaning set forth in Section 1
8.5
Indemnitee
has the
meaning set forth in Section 5.
8.6
Indemnitor
has the
meaning set forth in Section 5.
8.7
Source
Code
means a
copy of the source code (the computer instructions in human readable computer
language form on magnetic media) to the Software, including all upgrades and
enhancements, plus any pertinent commentary or explanation that may be used
by
Catuity’s programmers, including, but not limited to those incorporated into the
Software. The Source Code shall include system documentation, statements of
principles of operation, and schematics, all as necessary or useful for the
effective understanding, maintenance and use of the Source Code. To the extent
that the development environment employed by Catuity for the development,
maintenance, compilation, and implementation of the Source Code includes any
device, programming, or documentation not commercially available to Original
Ink
on reasonable terms through readily known sources other than Catuity, the Source
Code shall include all such devices, programming, or documentation. The
foregoing reference to such development environment is intended to apply to
any
programs, including compilers, workbenches, tools, and higher-level (or
proprietary) languages, used by Catuity for the development, maintenance, and
implementation of the Source Code.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first above written
| Catuity Inc. | Original Ink LLC | ||
| By: | By: | ||
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Xxxxxxxx
X. Xxxxxxx Xx.
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Xxxx
Xxxxxx
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Director
and Authorized Person
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Member
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