FIRST AMENDMENT TO LICENSE AND OPTION AGREEMENT
This Amendment, dated as of July 22, 1999, is made by and between
XxxxxXxxxxxxx.Xxx, Inc., a Delaware corporation (the "Licensee"), and Automated
Solutions, Inc., a Utah corporation (the "Licensor").
RECITALS:
Licensor and Licensee have entered into a License and Option Agreement,
dated as of July 1, 1999 (the "License Agreement"). Capitalized terms used in
these recitals have the meanings given to them in the License Agreement unless
otherwise specified.
Licensee has requested that certain amendments be made to the License
Agreement, which Licensor is willing to make pursuant to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, it is agreed as follows:
1. Capitalized terms used in this Amendment which are defined in the License
Agreement shall have the same meanings as defined therein, unless otherwise
defined herein.
2. The License Agreement is hereby amended to add the following new Section 1.1,
which new Section 1.1 will replace in its entirety the original Section 1.1 in
the License agreement:
"2.1 In consideration of the non-refundable, irrevocable payment by
Licensee to Licensor of the sum of One Hundred Fifty Thousand Dollars
($150,000) which amount has been received by Licensor, Licensor hereby
grants to Licensee a fully-paid, exclusive, non-assignable license to
use the Licensor's presently existing source code (the "Source Code")
for Licensor's data extraction software known as the "Neural Cube?" and
the "ADEPT System?" (collectively, the "Data Extraction Technology")
solely in connection with Licensee's data extraction service bureau
business whereby Licensee proposes to extract Current Data (as such
term is defined below) from paper forms and convert such data to
electronic files in a manner similar to Licensor's past practices (the
"Field of Use"). For purposes of this Agreement, "Current Data" shall
mean data that has been entered on paper forms by clients or customers
or their affiliates no more than 180 days prior to submission of such
data to Licensee for extraction and conversion to electronic files.
Licensee's license hereunder is limited to the Field of Use. Licensee
acknowledges that its rights in the Data Extraction Technology are
limited to the license granted hereunder and that Licensor retains all
right, title and interest in and to the Data Extraction Technology
except for the limited license specifically granted to Licensee
hereunder. Licensor hereby grants to Licensee a fully-paid, exclusive,
non-assignable, license to use the Licensor's trade names "Neural
Cube?" and "ADEPT System? solely in the Field of Use. Licensee agrees
to protect and to not denegrate such trade names. Licensor shall
deliver to Licensee the Source Code in tape medium. Licensee may engage
Licensor, on mutually agreeable terms to Licensor and Licensee to
install the Data Extraction Technology for use by Licensee at
Licensor's facilities. Licensee may modify, alter, enhance, change or
revise the Source Code or Data Extraction Technology; provided, (i) any
such modifications, alterations, changes or enhancements ("Changes")
shall automatically be deemed, and hereby are, licensed back to
Licensor on a royalty-free, non-exclusive basis for use solely outside
of the Field of Use, and (ii) Licensee shall, on demand, promptly
deliver to Licensor a tape of the source code for the Changes, together
with a copy of all documentation related thereto. The Licenses granted
under this Section 1.1 shall be perpetual, subject to Licensor's right
to terminate the exclusive nature of the Licenses (i) with respect to
the trucking industry promptly upon notice to Licensee in the event
Licensee ceases to actively market to the trucking industry in the
Field of Use using the Data Extraction Technology; and (ii) in the
event Licensee breaches or becomes in default as provided in Section 2
of the Escrow Agreement dated July 22, 1999 entered into in connection
herewith with Licensor and LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
Licensee shall be deemed to have ceased to actively market to the
trucking industry if Licensee fails to add at least two new customers
(other than those customers listed in Exhibit "A" to the License
Agreement) in the trucking industry in any twelve-month period
beginning August 1, 1999. Licensee shall provide Licensor with a copy
of all new customer contracts after the date hereof relating to the
trucking industry as Licensee enters into such contracts."
3. The License Agreement is hereby amended to add the following additional
language to the end of Section 4:
"In the event Wal*Mart Stores, Inc. demands a refund of the $11,000
paid to Licensor as of July 1, 1999, in connection with the contract
between Licensor and Wal*Mart Stores, Inc. dated March 16, 1999, the
Licensor agrees to indemnify and hold harmless Licensee for any amounts
paid by Licensee to Wal*Mart Stores, Inc. in connection with any such
demand, up to a maximum of $11,000.
4. The License Agreement is hereby amended to add a new Section 13 to read
in its entirety as follows:
"Section 13. Remedies. In addition to any other remedies provided for
herein, in the event of a breach or default under the terms of this
Agreement by either party, the defaulting party agrees to pay all
out-of-pocket expenses including reasonable attorneys' fees and legal
expenses incurred by or on behalf of the non-defaulting party in the
enforcement of this Agreement, in exercising any remedy arising from
such breach or default, or otherwise related to such breach or default.
Regardless of any breach or default, the defaulting party agrees to pay
all expenses, including reasonable attorneys' fees and legal expenses,
incurred by the non-defaulting party in any bankruptcy proceedings of
any type involving the non-defaulting party or this Agreement,
including, without limitation, expenses incurred in modifying or
lifting the automatic stay, determining adequate protection, use of
cash collateral, or relating to any plan of reorganization."
5. Except as explicitly amended by this Amendment, all of the terms and
conditions of the License Agreement shall remain in full force and effect.
6. The Licensee hereby represents and warrants to the Licensor as follows:
6.1 The Licensee has all requisite power and authority to execute this
Amendment and to perform all of its obligations hereunder, and this Amendment
has been duly executed and delivered by the Licensee and constitutes the legal,
valid and binding obligation of the Licensee, enforceable in accordance with its
terms.
6.2 The execution, delivery and performance by the Licensee of this
Amendment have been duly authorized by all necessary corporate action and do not
(i) require any authorization, consent or approval by any governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, (ii) violate any provision of any law, rule or regulation or of any
order, writ, injunction or decree presently in effect, having applicability to
the Licensee, or the articles of incorporation or bylaws of the Licensee, or
(iii) result in a breach of or constitute a default under any indenture or loan
or credit agreement or any other agreement, lease or instrument to which the
Licensee is a party or by which it or its properties may be bound or affected.
7. This Agreement may be executed in counterparts by facsimile, each of
which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
8. Licensee and Licensor are simultaneously herewith entering into the
Escrow Agreement.
IN WITNESS WHEREOF, the Licensor and Licensee have executed this
Amendment through their authorized signatories effective as of the date first
above written.
AUTOMATED SOLUTIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxx, President
XXXXXXXXXXXXX.XXX, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx, III
----------------------------
Xxxxx X. Xxxxxxxxxx, III
Its: Vice-President/CFO
