EXHIBIT 10.6
[Execution Copy]
SOFTWARE LICENSE AGREEMENT
This Software License Agreement is made this 31st day of March, 2004 ("the
Effective Date"), by and between Natural Health Trends Corp., a Florida
corporation, ("NHTC"), MV MergerCo, Inc., a Delaware Corporation (hereinafter
"MergerCo"), and MarketVision Consulting Group, LLC, a Delaware LLC having a
registered address of 0 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxx 0X, Xxxxx, Xxxx Xxxxxx,
Xxxxxxxx 00000, ("Licensee").
BACKGROUND
Under that certain Agreement and Plan of Merger dated March 31, 2004 (as the
same may be modified, amended, supplemented and/or restated from time to time,
the "Merger Agreement"), among Natural Health Trends Corp., MV MergerCo, Inc.,
and MarketVision Communications Corporation ("MVCC"), the MarketVision Software
(as defined in the Merger Agreement) developed and owned by MVCC became owned by
MergerCo.
This is the MarketVision Software License Agreement referred to (and defined as
such) in the Merger Agreement. It is a condition precedent to the consummation
of the transactions contemplated by the Merger Agreement that NHTC and MergerCo
execute and deliver this Agreement.
Now, therefore, in consideration of the premises and mutual covenants and
undertakings herein contained and of each and every act performed or to be
performed hereunder, NHTC, MergerCo, and Licensee hereby agree and covenant
as follows:
1. Definitions.
1.1 Software: means the MarketVision Software in executable and
machine-interpretable form, and any updates and enhancements thereto made by or
for any party to this Agreement.
1.2 Documentation: means, with respect to a software program of the
Software, the source code, if applicable (with comments as may exist), as well
as any pertinent commentary or explanation prepared by or for, or that is the
property of, the owner, developer, author, or maintainer, including without
limitation all notes, flow charts, programmer's and user's manuals.
1.3 Intellectual Property Rights: means patent rights (including patent
applications and disclosures), copyrights (including, but not limited to, rights
in audiovisual works), trademark rights (including but not limited to
trademarks, whether registered or not), trade secret rights, rights of priority
and any other intellectual property right recognized in any country or
jurisdiction in the world.
1.4 Trademark: means the service xxxx and trademark MARKETVISION in
the goods and services of the development, distribution, and maintenance of
the Software.
1.5 Other Definitions: Capitalized terms not otherwise expressly
defined in this Agreement shall have the meanings set forth in the
Merger Agreement.
2. License. Subject to the terms and conditions of this Agreement,
MergerCo grants to Licensee an irrevocable, exclusive, perpetual, royalty-free,
fully-paid, worldwide, transferable, sublicensable right and license to use,
copy, modify, distribute, rent, lease, enhance, transfer, market, and create
derivative works of the Software and Documentation, and to xxx for infringement
of the Software and Documentation for its own account and without right of
accounting to Licensor. MergerCo further grants to Licensee an irrevocable,
exclusive, perpetual, royalty-free, fully-paid, worldwide, transferable,
sublicensable right and license to use the Trademark in connection with its
development, distribution, and maintenance of the Software and Documentation.
3. Limited Rights. Notwithstanding the foregoing, Licensee agrees that
during the period commencing on the date hereof and ending on the date upon
which an Event of Default occurs, (i) subject to Licensor's compliance with
Section 6 below, Licensee agrees to waive its right to exclusivity granted under
Section 2 above, and to waive its rights to sublicense, distribute, rent, lease,
transfer, market, and xxx for infringement of, the Software and Documentation,
in order to enable Licensor to use the Software and Documentation, and to grant
such restricted licenses to the Software and Documentation to third parties as
are permitted herein. Following the occurrence of an Event of Default, (a) each
and every element of Licensee's waiver under this Section 3 of exclusivity and
of rights shall terminate, and (b) Licensee may exercise and exploit every right
granted to it under Section 2 above, such rights to be exclusive except as
subject to MergerCo's retention of a limited right to use the Software and
Documentation for Licensor's (Licensor's affilate's, or other permitted owner's)
internal use only and not as an application service provider or service bureau,
and (ii) MergerCo shall not rent, lease, license, transfer or distribute the
Software or the Documentation without the prior written consent of Licensee;
provided however, that NHTC, MergerCo or any of their affiliates or joint
ventures may transfer the ownership of the Software to any third party in
connection with a sale of all, or substantially all, of the assets of such
entity, subject in each case to Licensee's rights, and the acquiring party's
assumption of all obligations, under this Agreement.
4. Proprietary Rights. All right, title, interest, ownership and
proprietary rights in and to the Software and Documentation (including
derivative works, enhancements, corrections, or improvements made by Licensee,
but only such made prior to an Event of Default) shall remain in MergerCo, NHTC,
or any affiliate thereof, as the case may be, subject in each case to Licensee's
rights under this Agreement. MergerCo's rights under this Section 4 will include
all Intellectual Property Rights in the Software and Documentation, but shall
exclude any Intellectual Property Rights in any derivative works, enhancements,
corrections, or improvements that Licensee may create following the occurrence
of an Event of Default.
5. Maintenance. During the term of this Agreement, MergerCo and/or NHTC,
any affilate thereof or other permitted owner of the Software and Documentation
will, upon written request from Licensee from time to time, provide Licensee the
following materials and standard maintenance services for the Software through
electronic download, electronic mail transmission, or physical delivery: (i) the
Software and Documentation as they exist as of the date of this Agreement; (ii)
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corrections of substantial defects in the Software; and (iii) periodic updates
of the Software that may incorporate (a) corrections of any Software defects,
(b) fixes of any Software bugs, and (c) any enhancements to the Software,
created, designed, or implemented by MergerCo, NHTC, and/or their employees,
contractors, and agents. Standard maintenance services do not include:
(i) custom programming services; (ii) on-site support; or (iii) hardware and
related supplies.
6. Restrictions on Licensing of Software by Licensor. During the period
(the "Restricted Period") commencing on the date hereof and ending on the
earlier of (a) the occurrence of an Event of Default (as hereinafter defined),
or (b) the date on which an Event of Default can no longer occur (because the
Promissory Notes have been paid in full and a Share Default (as hereinafter
defined) is incapable of occurring (due to the price threshold having been
satisfied), Licensor shall not license the Software or the Documentation to any
third parties or allow any third parties to use the Software unless (x) such
license or use is pursuant to a written agreement for use of the Software solely
on an application service provider basis with services to be provided by
Licensor ("Third-Party License"); (y) such Third-Party License is expressly
assignable by Licensor to Licensee following an Event of Default without the
consent of the third-party licensee; and (z) other than such client modules as
are necessary for the third-parties' use of the Software, a copy of the Software
is not made available nor delivered to such third-party licensee; provided
however, that the Licensor may deliver to a reputable escrow agent a copy of the
Software source code (and updates thereto) pursuant to a customary source code
escrow agreement that provides, inter alia, that the third party licensee's
rights to use the Software upon a release event are limited to such use
necessary for the third-party licensee to exercise its license rights under the
Third-Party License.
7. Engagement of Licensee and Assignment of Licenses. Following an Event
of Default: (i) Licensee shall perform application service provider services (in
a manner consistent with the services provided by MVCC prior to the date hereof)
featuring the Software to Licensor, if elected by Licensor; (ii) thereafter
Licensor shall pay Licensee until all obligations due and payable under the
Promissory Notes have been paid in full (a) $36 for each newly signed
distributor of Licensor, MergerCo, NHTC, or any affiliate thereof, if the total
outstanding obligations under the Promissory Notes exceeds $500,000, and (b) $18
for each newly signed distributor of Licensor, MergerCo, NHTC, or any affiliate
thereof, if the total outstanding obligations under the Promissory Notes is
equal to or less than $500,000; (iii) Licensor shall assign to Licensee all of
Licensor's rights and obligations under any licenses or application service
provider agreements pertaining to the Software and elected by Licensee, entered
into by Licensor with third parties; and (iv) any waiver of, or restriction on,
Licensee's rights under Section 2 herein shall terminate.
8. Disclaimers. MERGERCO AND NHTC MAKE NO WARRANTIES, WHETHER EXPRESS OR
IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
THE SOFTWARE PROVIDED UNDER THIS AGREEMENT IS "AS IS".
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9. Term and Termination. This Agreement becomes effective as of the
Effective Date and will terminate on March 31, 2008; provided however, if an
Event of Default has occurred prior to such termination date, this Agreement
shall continue until terminated in writing by Licensee.
10. Event of Default. Each and any of the following events shall comprise
an Event of Default under this Agreement:
10.1 The Issuer under the any Promissory Note fails to make a payment
when due and that failure is not cured within 30 days after written notice from
any of the holders thereof or their agent;
10.2 The Licensor defaults on any payments due under the Employment
Agreements, as defined in the Merger Agreement, between Licensor and a member of
the Licensee; or
10.3 A "Share Default" occurs, defined as the Market Value per share of
the NHTC Common Stock failing to equal or exceed $10.00 per share for any one
(1) rolling period of six (6) consecutive months during the three-year period
commencing on the earlier of (i) the first anniversary of the date of this
Agreement, or (ii) the date on which the Merger Shares are registered with the
Securities and Exchange Commission for resale to the public.
11. Confidentiality. Confidential Information shall include the Software,
Documentation, the terms under this Agreement, and all information clearly
identified as confidential. During the Restricted Period, Licensee shall hold
all Confidential Information in confidence, and shall take all reasonable steps
to ensure that Confidential Information is not disclosed or distributed by its
employees or agents to third parties not subject in writing to the
confidentiality obligations in this Section. MergerCo and NHTC shall hold all
Confidential Information in confidence, and shall take all reasonable steps to
ensure that Confidential Information is not disclosed or distributed by their
respective employees or agents except to permitted third parties that are
subject in writing to the confidentiality obligations in this Section.
12. General Provisions.
12.1 Independent Contractor Relationship. The relationship between
MergerCo and Licensee established by this Agreement is that of independent
contractors. No franchise, joint venture or partnership is established by this
Agreement. Neither party is the agent, broker, partner, employee, or legal
representative of the other for any purpose.
12.2 Assignment. Neither party will have the right to assign this
Agreement in whole or in part without written approval of the other party, which
approval will not be unreasonably withheld or delayed. However, either party may
assign this Agreement without such consent in connection with a merger,
acquisition, corporate reorganization or sale of all or substantially all of its
assets, unless such transaction would result in an assignment to an entity
reasonably deemed to be a direct competitor of the other party. This Agreement
will inure to the benefit of, and will be binding upon, the parties and their
successors and permitted assigns.
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12.3 Notices. All notices under this Agreement must be in writing and
sent to the address of the receiving party specified below, xxx xxxx xxxxxxxx,
Xxxxxx Xxxxxx registered or certified mail, return receipt requested, or
recognized overnight courier service. Notice shall be effective upon receipt if
hand delivered or if delivered by overnight courier, or three (3) days after
posting if deposited in U.S. mail. The parties may change their notice address
by giving notice in accordance with this Section.
12.4 Agents and Subcontractors. MergerCo may use third parties under
contract with MergerCo to assist MergerCo in the performance of its obligations
under this Agreement, provided that MergerCo will remain responsible for all
its obligations under this Agreement whether or not such third parties so
assist MergerCo.
12.5 Jurisdiction and Venue. This Agreement and any dispute arising
from or relating to the performance or breach hereof shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware,
without reference to conflicts of laws principles. The parties irrevocably
agree to the exclusive jurisdiction of the federal or state courts located
in Delaware.
12.6 Force Majeure. Nonperformance by either party shall be excused to
the extent that performance is rendered impossible by strike, fire, flood,
earthquake, governmental acts or orders or restrictions, or any other
reason when failure to perform is beyond the reasonable control of the
nonperforming party.
12.7 No Waiver. The waiver by either party of a breach of any provision
of this Agreement or the failure by either party to exercise any right hereunder
shall not operate or be construed as a waiver of any subsequent breach or as a
waiver of any other right.
12.8 Severability. If any provision of this Agreement is held to be
unenforceable for any reason, it will be modified rather than voided, if
possible, in order to achieve the intent of the parties to this Agreement to the
extent possible. Any provision held overbroad as written will be deemed amended
to narrow its application to the extent necessary to make the provision
enforceable under applicable law, and enforced as amended. In any event, all
other provisions of this Agreement will be deemed valid and enforceable to the
full extent.
12.9 Complete Agreement. This Agreement and any Exhibits constitute the
complete agreement between the parties and supercede all prior or
contemporaneous agreements or representations, written or oral, concerning the
subject matter of this Agreement. This Agreement may not be modified or amended
except in writing signed by a duly authorized representative of each party; no
other act, document, usage or custom shall be deemed to amend or modify this
Agreement. This Agreement shall also supersede all terms of any unsigned,
"shrinkwrap," or "clickwrap" license that may be included in any package, media,
or electronic version of the Software or Documentation to the extent
inconsistent with this Agreement.
12.10 Bankruptcy. The parties acknowledge, intend, and agree that the
rights granted to Licensee under this Agreement, excluding the trademark rights
and Trademark, are grants of intellectual property for which the Licensee is
entitled to the protections of 11 U.S.C. s. 365(n).
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AGREED TO:
MV MergerCo, Inc.: MarketVision Consulting Group, LLC:
Signature: /s/ XXXX X. XXXXXXXX Signature: /s/ XXXX XXXXXXXXX
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Name: Xxxx X. Xxxxxxxx Name: Xxxx Xxxxxxxxx
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Title: CFO and Secretary Title:
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Address: Address:
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Natural Health Trends Corp.
Signature: /s/ XXXX X. XXXXXXXX
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Name: Xxxx X. Xxxxxxxx
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Title: President and Chief Financial Officer
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Address:
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