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EXHIBIT 10.6
LICENSE AGREEMENT
THIS AGREEMENT (the "Agreement"), made and entered into as of
the 18th day of November, 1996, by and between XXXX XXXXXXXX ENTERPRISES, INC.,
a Georgia corporation ("Licensor") and XXXXXX BUSINESS SYSTEMS, INC., a Georgia
corporation ("Licensee").
WITNESSETH:
WHEREAS, Licensor owns all right, title and interest in and to
a certain computer architecture concepts, algorithms and processes for the
building of computer systems, which computer architecture, concepts, algorithms
and processes is presently known as MERAD, as more fully described on Exhibit
"A" attached hereto ("MERAD"),
WHEREAS, Licensee desires to obtain from Licensor a perpetual
non-exclusive, transferable license to use MERAD and Licensor desires to grant
Licensee such a license subject to the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the premises and the
mutual promises and covenants contained herein and of other good and valuable
consideration, the receipt, adequacy and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. GRANT OF LICENSE.
(a) Licensor hereby grants to Licensee, and Licensee hereby
accepts, a non-exclusive, transferable right and license to use MERAD and any
supporting Documentation (as hereinafter defined) for any purpose whatsoever,
subject to the restrictions herein noted below and under applicable law.
(b) For purposes of this Agreement, "Documentation" shall
refer to such materials, in either written, audio, video or machine readable
form, created by Licensor which are intended to describe the use or
characteristics of MERAD.
(c) Licensee hereby agrees and acknowledges that Licensee
shall not have the right or privilege to sub-license MERAD to any third party or
to otherwise copy, decompile, disassemble, reverse engineer, transfer, assign,
rent or sell the MERAD or Documentation in any manner whatsoever except as may
be permitted by this Agreement.
2. USE OF LICENSOR'S TRADEMARKS, COPYRIGHTED MATERIAL AND
PATENTS. Licensee acknowledges that MERAD, including the Documentation, and the
name MERAD (hereinafter the "Xxxx"), may be protected under the laws of the
State of Georgia and/or the laws of the United States by one or more registered
or unregistered trademarks and/or copyrights in favor of Licensor. Licensee
further acknowledges that MERAD may be subject to one or more patent
applications filed by Licensor with the United States Patent and Trademark
Office (the "Patents"). Licensor agrees that Licensee shall have the right to
use the Xxxx, MERAD and Documentation in connection with the rights licensed
hereby for so long as this Agreement is in force and effect. Licensee
acknowledges that all rights in and to the Xxxx, MERAD, the Patents and
Documentation are and shall remain the sole and exclusive property of Licensor
and that Licensee shall have no ownership rights or other rights in the Xxxx,
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MERAD, Patents or Documentation other than the right to use the same on the
conditions stated in this Agreement. The Xxxx, or any xxxx confusingly similar
to the same, shall not be used by Licensee in conjunction with any other use or
product, other than as expressly permitted herein or with the prior written
consent of Licensor. Licensee specifically agrees that it shall not at any time,
contest Licensor's proprietary rights in or title to the Xxxx, MERAD, Patents or
Documentation.
3. ROYALTY. (a) Licensee agrees that for the license granted
herein, Licensee shall be, and hereby is from this date forward, obligated to
pay to Licensor a royalty payment equal to ten percent (10%) of the gross
revenues (less only ordinary and customary discounts and allowances for returns)
recognized by Licensee, in accordance with generally accepted accounting
principles, on any software products that directly or indirectly incorporate
MERAD or any derivative thereof, or otherwise utilize MERAD or any derivative in
any manner whatsoever (the "Royalty Payment"). Each Royalty Payment shall be due
and payable thirty (30) days after the end of each calendar quarter commencing
with the calendar quarter ending December 1996. Notwithstanding the amounts that
may come due hereunder, Licensee shall be entitled to a credit against the
Royalty Payment otherwise due hereunder in the amount of $_____ representing
funds Licensee has previously provided to Licensor.
(b) Licensee shall provide to Licensor, with each Royalty
Payment, an accounting of such Royalty Payment in such detail as reasonably
acceptable to Licensor, and a certificate of Licensee's chief financial officer
certifying that such accounting is complete and accurate to the best of such
officer's knowledge and belief and is based upon generally accepted accounting
principles consistently applied.
(c) Licensee shall maintain adequate books and records
relating to the sale of any software products incorporating MERAD or any
derivative, and Licensee agrees to provide Licensor and its authorized
representatives and agents access to all of such books and records as are
reasonably requested by Licensor or its agents and representatives in order to
verify the information provided in the accounting and the calculation of the
Royalty Payment. Licensor agrees to keep any information derived from such
examination in confidence except as may be necessary to protect Licensor's
rights hereunder.
(d) In the event that the Licensor disagrees with the
accounting or the calculation of the Royalty Payment, Licensor shall have the
right, during the ninety (90) day period after any calendar year, to have a firm
of certified public accountants audit and inspect the books and records relating
to gross revenues derived from MERAD or any derivative, and to verify the
Royalty Payments paid to Licensor during such year. The audit shall be conducted
during reasonable business hours and on reasonable notice to Licensee., and
Licensee shall cooperate fully and completely in the performance of such audit
and inspection. If any such audit discloses a deficiency in the amount of any
Royalty Payment made during the period examined, then Licensee shall be
responsible for the payment of such deficiency, and the costs and expenses of
such audit shall be paid by Licensee if a deficiency of five percent (5%) or
greater is determined to exist, and the costs and expenses of the audit shall be
paid by Licensor if a deficiency less than five percent (5%) is determined to
exist.
4. RIGHTS RESERVED. The license granted hereby shall in no way
prevent or otherwise limit Licensor from continuing to license, sell or use the
Xxxx, MERAD or Documentation
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in any manner whatsoever or to prevent Licensor from enhancing or modifying
MERAD or Documentation in any manner or to any degree. Licensor shall be under
no obligation to provide any enhancements to MERAD to Licensee unless a separate
maintenance and support agreement is entered with Licensor that would require
the provision of any such updates or modifications.
5. TERM OF THE AGREEMENT. The parties hereto agree that the
term of this Agreement and the license granted hereby shall be of perpetual
duration, and Licensee shall be entitled to use the MERAD, Documentation and
Xxxx, as provided for herein, for so long as Licensee is not in breach of any
provision in this Agreement or any other agreement between the parties hereto.
6. DELIVERY OF MERAD; TRAINING; COPIES.
(a) Upon the execution of this agreement, Licensor shall
deliver to Licensee one copy of MERAD and one copy of the Documentation
necessary to fully operate MERAD.
(b) Licensor shall provide training material and 2 days of
group training for Licensee's personnel at Licensee's premises during normal
working hours. Licensor is not obligated to provide any other training or
support services to Licensee unless Licensee enters into a Maintenance and
Support Agreement and/or a Consulting Services Agreement, copies of which have
been made available to Licensee for review.
(c) Licensee shall be entitled to create one backup copy of
MERAD for its own internal use and benefit, as an archive copy only, and shall
not be permitted to make any additional copies, or any copies of the
Documentation for any other purposes without the express written permission of
Licensor.
7. REPRESENTATION AND WARRANTIES OF LICENSOR.
(a) Licensor hereby represents and warrants to Licensee that
Licensor is the sole and exclusive owner of all rights in and to MERAD, the
Documentation and the Xxxx; that it has the full right and power to grant the
license contemplated by this Agreement; and that such license will not violate
the rights of any other person or entity or any other agreement to which
Licensor is a party. OTHER THAN THESE EXPRESS WARRANTIES, LICENSOR MAKES NO
OTHER EXPRESS OR IMPLIED WARRANTIES OF ANY KIND WHATSOEVER TO LICENSEE,
INCLUDING ANY AND ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
OR INTENDED PURPOSE. LICENSOR EXPRESSLY DISCLAIMS ANY WARRANTY THAT MERAD WILL
MEET ANY PARTICULAR REQUIREMENT OR BUSINESS NEED OF LICENSEE, EVEN IF LICENSEE
HAS BEEN ADVISED OF SUCH REQUIREMENT OR NEED. BY ACCEPTING THIS LICENSE,
LICENSEE SPECIFICALLY ACKNOWLEDGES THAT LICENSEE IS AWARE THAT MERAD IS IN ITS
EARLY PHASES OF DEVELOPMENT AND THAT FUTURE VERSIONS OF MERAD MAY BE NECESSARY
TO FULLY IMPLEMENT THE DESIRED FEATURES OF MERAD OR TO DEBUG ANY PROBLEMS THAT
MAY ARISE.
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(b) As Licensee's sole remedy for a breach of the warranties
contained herein, Licensor agrees to defend and indemnify Licensee with respect
to any action brought against Licensee to the extent that such action is based
upon a claim that the Agreement constitutes direct infringement of any
proprietary right or copyright in the United States and will pay all damages and
costs attributable to such claim which may be finally awarded against Licensee
in any such action; provided, however, that Licensor shall be promptly informed
by Licensee in writing of any such claim and furnished a copy of all
communications or other documents relating thereto, shall be given by Licensee
all requisite assistance and information necessary to defend or settle such
claim, and shall have the absolute right and authority to defend or settle such
claim.
(c) EXCEPT AS EXPRESSLY STATED ABOVE, IN NO EVENT SHALL
LICENSOR BE LIABLE TO LICENSEE FOR ANY LOST PROFITS, LOST SAVINGS OR OTHER
INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO, DAMAGES
ARISING FROM OR AS A RESULT OF THE USE OR THE INABILITY TO USE MERAD,
DOCUMENTATION OR THE XXXX FOR ANY REASON WHATSOEVER, OR THE LOSS OF DATA OR
OTHER PROPRIETARY INFORMATION OF LICENSEE OR DAMAGE TO ANY OF LICENSEE'S
SOFTWARE, HARDWARE OR ANY OTHER PERIPHERAL COMPUTER EQUIPMENT, LICENSEE
SPECIFICALLY ACKNOWLEDGES THAT MERAD IS IN ITS DEVELOPMENT STAGE AND MAY NOT BE
FULLY OPERATIONAL.
8. REPRESENTATION AND WARRANTIES OF LICENSEE. Licensee
represents and warrants that it has full power and authority to execute and
deliver this Agreement and to perform its obligations hereunder, and
acknowledges that it has the sole and exclusive responsibility for the
supervision, management and control of its use of MERAD.
9. TERMINATION AND DUTIES UPON TERMINATION.
(a) Notwithstanding the provisions of Paragraph 5 hereinabove,
this Agreement may be terminated by Licensor upon the breach of any provision of
this Agreement by Licensee, which breach continues after Licensee receives
written notice from Licensor of such claim of breach and the failure and refusal
of Licensee to immediately correct or refrain from the activity constituting the
breach.
(b) In the event of termination of this Agreement for any
reason, Licensee agrees to immediately discontinue and refrain from any further
use of MERAD, the Documentation or Xxxx and shall immediately return to Licensor
the original and any copies of MERAD and the Documentation that it may have in
its possession or under its control, or arrange for the return of any copies not
under its control within ten (10) days after the termination of the Agreement.
Upon termination of the Agreement for any reason whatsoever, Licensee shall be
entitled to retain all of the Royalty Payments that have been previously paid by
Licensee and shall not be obligated to return any part thereof to Licensee; the
parties hereby expressly agreeing that such Royalties will have been fully
earned by Licensor as of the date any gross revenues from any products
containing MERAD or derived by MERAD are recognized by Licensee.
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(c) Notwithstanding the termination of this Agreement, for any
reason, the restrictions provided for in paragraph 10 below, governing
confidentiality, shall survive this Agreement and the termination of the license
granted hereby and shall continue to be binding upon Licensee as provided
therein. Nothing herein shall be construed as limiting any remedy that Licensor
may have against Licensee, at law or in equity, as a result of Licensee's breach
of any part of this Agreement.
10. CONFIDENTIALITY. Licensee acknowledges that MERAD and the
Documentation are proprietary and confidential to Licensor and may constitute
trade secrets and know-how of Licensor. Licensee shall not use or disclose any
information received from Licensor under this Agreement or that it learns from
its use of MERAD or the Documentation for any purpose other than the use
intended and authorized by this Agreement. Licensee agrees that such disclosure
to or use by any party other than employees of Licensee to whom disclosure must
be made in order for Licensee to perform its ordinary business services using
MERAD and the Documentation, or threatened disclosure or use, will be a material
breach of this Agreement and Licensor shall be entitled to injunctive or other
equitable relief to prevent unauthorized use or disclosure. The foregoing
restrictions on disclosure of information shall apply so long as the information
has not properly come into the public domain through such disclosure by Licensor
or otherwise. Licensee further agrees that Licensee shall not itself, or permit
others to copy, disclose, recreate or modify MERAD or any of the Documentation
without the prior written permission of Licensor, except to the extent permitted
by this Agreement.
11. MISCELLANEOUS.
(a) RELATIONSHIP OF THE PARTIES. At all times hereunder, with
respect to this Agreement, the relationship of Licensor to Licensee shall be
that of a licensor and licensee and shall not be construed to constitute the
relationship between Licensor and Licensee as that of partners, joint venturers,
principal and agent or employer and employee.
(b) NO ENHANCEMENT PERMITTED: NEW VERSIONS. Licensee hereby
agrees and acknowledges that it shall not be permitted to enhance or otherwise
modify MERAD without the express written permission of Licensor. Licensee and
Licensor further agree that Licensor shall not be obligated to provide Licensee
with any enhanced or updated versions of MERAD or the Documentation thereto or
to modify or conform MERAD to any specific business application of Licensee
unless Licensee and Licensor enter the Maintenance and Support Agreement and/or
the Consulting Services Agreement, as appropriate.
(c) NO TRANSFER OR ASSIGNMENT OF LICENSE.
(i) This Agreement and the rights and obligations
granted and assumed herein may not be transferred or assigned by
Licensee by sale, merger, acquisition or otherwise, without the prior
written consent of Licensor which consent shall not be unreasonably
withheld; provided that Licensee shall be entitled to assign this
Agreement to an affiliate that is under the control of, controlled by,
or under common control with Licensee without obtaining the consent of
Licensor (provided prior notice of such assignment is provided to
Licensor before such assignment shall
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become effective); and provided further that with respect to any
authorized transfer hereunder Licensee remains obligated for any
amounts due or to become due hereunder or for any breach hereof by such
assignee. Notwithstanding anything herein to the contrary, any
authorized assignee shall be bound to the terms and provisions hereof
as the same as if such assignee were the Licensee hereunder. This
Agreement may be automatically and immediately terminated, at the
option of Licensor, upon any unapproved or attempted assignment or
transfer of the license granted herein, MERAD, the Documentation or any
copy thereof. Notwithstanding the foregoing, Licensor expressly
acknowledges that Licensee shall be entitled to utilize or incorporate
MERAD into other software products; provided, however, Licensee shall
not be authorized to sell or distribute MERAD as a stand alone product
or to disclose the confidential and proprietary information or code
that comprises MERAD to any third party whatsoever.
(ii) Licensor shall have the unrestricted right to
transfer or assign this Agreement without the prior consent of
Licensee.
(d) BINDING EFFECT. Subject to subparagraph (c) hereinabove,
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors, assigns and legal representatives.
(e) ENTIRE AGREEMENT. Except as may be modified by the
Maintenance and Support Agreement or the Consulting Services Agreement entered
subsequent to or concurrently herewith, this Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior negotiations, representations or agreements, whether
written or oral. Any modification of this Agreement shall be in writing,
executed with the same formality as this Agreement and signed by a duly
authorized representative of each of the parties hereto.
(f) SEVERABILITY. Should any part or provision of this
Agreement be held unenforceable or in conflict with the laws of any
jurisdiction, then such part or provision shall be completely severable from
this Agreement and the validity of the remaining parts or provisions shall not
be affected by such holding.
(g) GOVERNING LAW. This Agreement is being entered into and
shall be governed by and construed in accordance with the laws of the State of
Georgia, and the parties agree that the appropriate courts in the State of
Georgia shall be the proper venue for the resolution of any disputes arising
hereunder.
(h) NOTICES. All notices required or permitted to be given
hereunder shall be in writing and deemed duly given if hand delivered or sent by
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
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If to Licensor:
Xxxx Xxxxxxxx Enterprises, Inc.
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: President
If to Licensee:
Xxxxxx Business Systems, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Attention: President
(i) WAIVER OF DEFAULT. The waiver of any default or breach
under this Agreement by either party shall not constitute a waiver of any rights
for any subsequent default or breach.
(j) SECTION HEADINGS. The section headings in this Agreement
are for reference purposes only and shall not affect the interpretation of this
Agreement.
(k) TIME IS OF THE ESSENCE. Time is of the essence of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above written.
XXXX XXXXXXXX ENTERPRISES, INC.
BY: /s/ XXXX X. XXXXXXXX
-----------------------------------------
XXXX X. XXXXXXXX, PRESIDENT
XXXXXX BUSINESS SYSTEMS, INC.
By: /s/ XXXXX XXXXXX
-----------------------------------------
XXXXX XXXXXX, PRESIDENT
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