SOFTWARE LICENSE AGREEMENT
This agreement ("Agreement") is entered into as of March 31, 2001
("Effective Date"), by and between Software Publishing Corporation, a Delaware
corporation ("Licensor") and Serif (Europe) Limited, an English company
("Licensee").
RECITALS
WHEREAS, Licensor owns, develops and distributes the Software Products (as
defined below) and Licensee owns, develops and distributes the HG Branded
Products (as defined in clause 2.2 below); and
WHEREAS, Licensee desires to acquire a license to use certain of Licensor's
trademarks with respect to certain of the Licensee's software products and
Licensor is willing to grant such rights to Licensee; and
WHEREAS, Licensee desires to acquire the rights to develop and distribute
the Software Products, and Licensor is willing to grant such rights to Licensee.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Licensor and Licensee hereby agree
as follows:
ARTICLE I
DEFINITIONS
1.1 "European Territory" means Europe.
1.2 "exploit" means to use, copy, package, market, distribute, display,
sell and/or sub- license, and the terms "exploiting" and
"exploitation" shall be interpreted accordingly.
1.3 "Intellectual Property Rights" means all patent, trademark, copyright,
trade secret and other intellectual property rights recognized by law.
1.4 "inventory" means components and packaging for the Software Products
and HG Branded Products used by the Licensee at the date of this
Agreement for sale of such products and stored at the Licensee's
premises at the date of this Agreement.
1.5 "Worldwide Territory" means anywhere in the world except the European
Territory.
1.6 "Royalty and Royalties" has the meaning set forth in Section 4 hereof.
1.7 "Software Products" means those software products listed on Schedule
1.5 hereto.
1.8 "Territory" means collectively the Worldwide Territory and the
European Territory.
1.9 "2001 Term" means the period from April 1, 2001 through March 31,
2002.
1.10 "2002 Term" means the period from April 1, 2002 through March 31,
2003.
ARTICLE II
GRANT OF LICENSES
2.1 Software Licenses. Licensor grants Licensee, during the term of this
Agreement or until terminated pursuant to Section 6.3.1, if earlier,
(a) for the 2001 Term, an exclusive license to exploit the Software
Products in the European Territory (the "European 2001 License"); (b)
for the 2002 Term, a non-exclusive license to exploit the Software
Products in the European Territory (the "European 2002 License"); and
(c) for the 2001 Term and the 2002 Term, a non-exclusive license to
exploit the Software Products in the Worldwide Territory (the
"Worldwide License"; and together with the European 2001 License and
European 2002 License, the "Software Licenses"). Each of the European
2002 License and the Worldwide License shall be automatically
renewable (on a non-exclusive basis) for successive two year terms if
there is and has been no failure on the part of Licensee to comply
with all of the terms and conditions of this Agreement and, in each
year of such respective license, with respect to the European 2002
License and the Worldwide License, not less than an aggregate of
$25,000 in Royalties are paid to Licensor pursuant to such license.
2.2 Trademark License. Licensor grants Licensee, during the term of this
Agreement or until terminated pursuant to Section 6.3.3, if earlier, a
non-exclusive, non- transferable license (the "Trademark License") to
use the "Harvard Graphics" name and trademark (the "Trademark") in the
Territory for the purpose of exploiting the products listed on
Schedule 2.2 ("HG Branded Products") and subsequent modification
thereof under the Trademark. Any use of the Trademark on products
other than the HG Branded products must be approved by Licensor in
writing in advance of such use. All such use of the Trademark must
reference the Trademark as being owned by Licensor. Licensor retains
the sole and exclusive right to own, hold, apply for registration of,
and register, the Trademark, during the term of and after the
termination or expiration of this Agreement. Licensee will neither
take nor authorize any activity inconsistent with such right.
2.3 Non-Competition. (a) The Licensor shall not during the 2001 Term in
any country within the European Territory exploit, nor license any
third party to exploit, the Software Products; provided, that if the
Trademark License terminates prior to the expiration of the 2001 Term,
this section 2.3 shall cease to have any force or effect; and
(b) So long as the Software Licenses continue in effect, Licensor
shall (i)
not make any direct sale of Software Products in the Territory except
pursuant to a strategic relationship established after the date of
this Agreement with respect to the Software Products; and (ii) refer
sales inquiries and reseller opportunities (except with respect to
Microgistix) to Licensee and cooperate in the transfer of marketing
and sales opportunities to Licensee, whether new or existing.
2.4 Technology License. Licensor hereby grants Licensee a non-exclusive
perpetual royalty-free license to use, in connection with the
distribution of the products listed on Schedule 2.3, throughout the
world any copyrighted material owned by Licensor which is currently
incorporated into the existing software products listed on Schedule
2.3 (the "Technology") and subsequent modification thereof. For
purposes of this Agreement, such license shall be referred to as the
"Technology License".
2.5 Websites. Licensee shall have the exclusive right to operate the
following websites of Licensor, subject to Licensor's reasonable
approval (such approval not to be unreasonably withheld or delayed) of
any content not directed to marketing and selling Software Products
and/or HG Branded Products or which could create liability to Licensor
or its affiliates:
xxx.xxxxxxxxxxxxxxx.xxx
2.6 Limitations. Licensee acknowledges that the Software Products and the
Trademark, and all Intellectual Property Rights related thereto,
whether affixed or applied to Serif products or otherwise, are the
property of Licensor and Licensee has no rights in the foregoing
except to the extent expressly granted by this Agreement.
2.7 Consents. Any license granted hereby that requires the consent or
approval of a third party is made subject to such consent or approval
being obtained if such consent or approval has not been obtained.
Licensor shall use its reasonable best efforts to obtain any such
consent or approval after the date hereof until such time as such
consent or approval has been obtained. Licensor shall cooperate with
Licensee to provide that, subject to Section 3.4, Licensee shall
receive Licensor's interest in the benefits provided by such third
party, provided that Licensee shall undertake to pay or satisfy the
corresponding liabilities for the enjoyment of such benefit; provided,
that nothing hereunder shall be deemed to be an assignment of any
agreement giving rise to such benefits.
2.8 Compliance with Licensor Agreement. Licensee acknowledges that is has
reviewed the terms of that certain Consent Agreement (the "Harvard
University Agreement"), dated as of June 29, 1989, between Harvard
University and Licensor. During the term of the Trademark License,
Licensor shall comply with all of Licensor's restrictions and
obligations under the Harvard University Agreement with respect to
Licensee's exploitation of the Trademark.
ARTICLE III
SOFTWARE
3.1 Software. Licensor licenses the Software Products "as is" and "where
is." Licensor shall not be obligated to provide any technical
assistance or customer support.
3.2 Delivery. Licensee acknowledges that Licensor has no obligation to
deliver additional source code for the Software Products. Licensee
further acknowledges that it is in possession of existing inventory of
the Software Products. Such inventory may be sold by Licensee,
provided that Licensor shall retain title to such inventory until the
sale of any such inventory by Licensee, upon which event title to the
proceeds from the sale of such units of inventory as shall have been
sold shall vest in Licensor and remain Licensor's property until the
cost of such sold inventory to Licensor and all Royalties payable
hereunder are accounted for and paid by Licensee to Licensor. Attached
hereto as Schedule 3.2 is a list of such inventory and the cost
thereof to Licensor. To the extent that any of the inventory is
determined by Licensor to be unsaleable, Licensor and Licensee will
either cooperate in good faith in disposing of such unsaleable
inventory or (i) at Licensor's request, such unsaleable inventory
shall be returned to Licensor at Licensor's cost or (ii) at Licensee's
request, the Licensor shall within 21 days of such request either
collect or dispose of any such inventory.
3.3 Modification. During the 2001 Term, Licensee shall have the
non-exclusive right to amend the source code and/or object code of the
Harvard Graphics products that are part of the Software Products;
provided that any such amendments do not interfere with the
operability of any Harvard Graphics products. Licensee shall not
include any third party technology which incur royalties to or require
license agreements with third parties without the consent of the
Licensor. Licensor shall have a perpetual royalty-free license to
market, sell and use any such amendments and, upon request of
Licensor, Licensee shall deliver to Licensor the source and object
codes related to any and all such amendments. In any event, and
whether or not requested by Licensor, Licensee shall deliver such
amendments, if any, to Licensee no less often than quarterly. Licensee
shall at all times keep Licensor fully informed as to any and all such
amendments made and in the process of being made.
3.4 Expenses. (a) Licensee shall be responsible for and shall pay any and
all expenses and/or license fees currently due and owing or payable to
third party licensors with respect to the HG Branded Products
(including royalties payable to third parties for embedded technology)
and shall, in respect of any third party technology that it wishes to
incorporate into the HG Branded Products pay any and all expenses
payable to any such third parties in respect of such incorporation.
(b) Licensor shall be responsible for and shall pay any and all
expenses and/or license fees currently due and owing or payable to
existing third party licensors in respect of the Software Products
(including royalties payable to existing third parties
for embedded technology but not with respect to Serif products).
3.5 Technical Support. Licensee shall provide technical support to all
users of the Software Products at the expense of the Licensee.
3.6 Microgistix. Licensee shall treat Microgistix no less favorably than
any other reseller of the Software Products.
ARTICLE IV
ROYALTY & PAYMENT PROCEDURE
4.1 Royalties. (a) In consideration for the licenses granted herein,
Licensee shall pay Licensor in U.S. Dollars a royalty ("Royalty" or
"Royalties"), payable within 30 days after the end of each calendar
quarter with respect to such quarter commencing with the quarter
ending June 30, 2001, as follows: (i) with respect to Software
Products, 12.5% of Net Receipts; and (ii) with respect to any HG
Branded Products by 3% of Net Receipts. Notwithstanding the foregoing,
Licensor shall be entitled to 100% of the Net Receipts in connection
with the OEM contract between Licensee and Microgistix. For purposes
hereof, Net Receipts shall mean the amounts received by Licensee in
connection with the sale, licensing or other commercial exploitation
of the Software Products, including any amendments or improvements
thereto, or HG Branded Products, as applicable, less (1) any refunds,
credits, discounts, allowances, rebates, returns and adjustments
consistent with normal business practices and (2) federal, state,
foreign or other taxes or tariffs imposed on the Software Products or
HG Branded Products, as applicable (not including any tax based on
Licensee's net income) and (3) any set-off, deduction or withholding
which the Licensee is required by law to set-off, deduct or withhold
on behalf of taxing authorities with respect to payments to Licensor.
(b) Together with each Royalty payment, Licensee shall deliver a
report setting forth the Software Products and HG Branded Products
shipped, sold and licensed, during the quarter to which the Royalty
payment relates. Such report shall set forth in detail all information
reasonably necessary to compute Net Receipts and Royalties due to
Licensor relating to such quarter. In the event a Royalty payment is
not received on its due date, such late payment shall accrue interest
at a rate equal to the lesser of (a) 12% per annum or (b) the maximum
rate permitted by law.
4.2 Books and Records. Licensee agrees to maintain adequate books and
records relating to the production and distribution of the Software
Products and the HG Branded Products, and the receipt of payment with
respect thereto, which books shall be maintained in sufficient detail
to enable Royalties due hereunder to be calculated.
4.3 Audit. Licensee agrees that Licensor or an accountant or other
representative ("Auditor") acting on Licensor's behalf and at
Licensor's expense may audit the books and records of Licensee which
relate to the Software Products or the HG
Branded Products and the quantity distributed or supplied pursuant to
this Agreement for the purposes of determining the accuracy of
Licensee's reports to Licensor. Licensor will provide to Licensee a
copy of the Auditor's written report within thirty days after the
audit is completed. Copies of all notes and work product shall remain
confidential pursuant to Section 7 of this Agreement. Audits shall not
occur more than twice per year and shall take place during normal
business hours, upon prior written notice, in such manner so as not to
unreasonably interfere with Licensee's business activities. If it is
established by the Auditor that there has been an underpayment to
Licensor of 7.5% or more of total Royalties due as at the date of the
audit's completion, Licensee shall pay Licensor all costs of such
audit, together with all unpaid Royalties.
ARTICLE V
REPRESENTATIONS, WARRANTIES AND INDEMNIFICATIONS
5.1 WARRANTY DISCLAIMER.
5.1.1 THE SOFTWARE PRODUCTS ARE PROVIDED AND LICENSED "AS IS" AND
THERE ARE NO WARRANTIES, REPRESENTATIONS, OR CONDITIONS,
EXPRESSED OR IMPLIED, WRITTEN OR ORAL, ARISING BY STATUTE,
OPERATION OF LAW, COURSE OF DEALINGS, USAGE OF TRADE OR
OTHERWISE, REGARDING THEM, OR ANY OTHER PRODUCT OR SERVICE
PROVIDED HEREUNDER OR IN CONNECTION HEREWITH BY LICENSOR.
LICENSOR DISCLAIMS ANY IMPLIED WARRANTY OR CONDITION OF
MERCHANTABLE QUALITY, SATISFACTORY QUALITY, MERCHANTABILITY,
DURABILITY, OR FITNESS FOR A PARTICULAR PURPOSE. NO
REPRESENTATION OR OTHER AFFIRMATION OF FACT, INCLUDING BUT
NOT LIMITED TO STATEMENTS REGARDING PERFORMANCE OR CONDITION
OF THE SOFTWARE PRODUCTS, WHICH IS NOT CONTAINED IN THIS
AGREEMENT, SHALL BE DEEMED TO BE A WARRANTY, CONDITION OR
REPRESENTATION BY LICENSOR.
5.1.2 LICENSEE NOT TO BIND. LICENSEE WILL GIVE AND MAKE NO
WARRANTIES OR REPRESENTATIONS ON BEHALF OF LICENSOR AS TO
QUALITY, MERCHANTABLE QUALITY, SATISFACTORY QUALITY,
MERCHANTABILITY, FITNESS FOR A PARTICULAR USE OR PURPOSE OR
ANY OTHER FEATURES OF THE SOFTWARE PRODUCTS AND LICENSEE
SHALL NOT INCUR ANY LIABILITIES, OBLIGATIONS OR COMMITMENTS
ON BEHALF OF LICENSOR.
5.2 Compliance with Laws. Licensee shall comply with all laws, rules,
regulations and industry standards, including, without
limitation, export restrictions and prohibitions,
existing with respect to its use, marketing and distribution of the
Software Products and HG Branded Products and the performance by
Licensee of its obligations hereunder in the jurisdictions where
Licensee carries on activities under this Agreement and where the
Software Products and HG Branded Products are distributed from time to
time. For each country in which Licensee intends to distribute the
Software Products or HG Branded Products, Licensee shall, at its own
expense, obtain and arrange for all government approvals, consents,
licenses, authorizations, declarations, filings, and registrations as
may be necessary or advisable for the distribution of the Software
Products and HG Branded Products according to the terms and conditions
of this Agreement, including but not limited to foreign exchange
approvals, import licenses, fair trade approvals, and customs
clearance.
5.3 Intellectual Property Protection. Licensee will give Licensor prompt
written notice of any such third party claim and fully cooperate with
Licensor in the defense of such claim. In the event that Licensee
becomes aware that a third party is potentially infringing on
Licensor's Intellectual Property Rights licensed to Licensee
hereunder, Licensee shall promptly notify Licensor thereof in writing.
Licensor shall, to the extent it deems advisable, prosecute such
infringement.
5.4 Indemnification. Licensor will indemnify Licensee against any and all
claims, demands, actions, costs (including all reasonable attorney's
fees and expenses), awards, damages and any other losses and/or
liabilities suffered by the Licensee and arising from or due to:
5.4.1 any third party claims that the Software Products or the
Trademark infringe the Intellectual Property Rights of such
third party; and
5.4.2 any claims by any customers of the Software Products and/or
Technology under any of the Licensor's end-user licenses.
ARTICLE VI
TERMINATION
6.1 Immediate Termination. A party may immediately terminate this
Agreement and all the licenses granted hereunder if the other party is
declared bankrupt; makes a general assignment for the benefit of
creditors; or suffers or permits the appointment of a receiver,
provided such action is not dismissed within thirty days.
6.2 Material Breach. Either party may terminate this Agreement and all the
licenses granted hereunder upon ten days written notice for breach of
the terms of this Agreement unless such breach is cured within such
ten days. In addition, Licensor may terminate this Agreement for
non-payment of Royalties as provided hereunder unless Licensee cures
such non-payment within five days of notice of non-payment.
6.3 Licensor's Right to Terminate.
6.3.1 Licensor shall have the right to terminate the Software
Licenses granted hereunder and the rights granted pursuant to
Sections 2.2, 2.3, 2.4 and 3.3, upon payment of a $75,000
termination fee to Licensee, (i) during the 2001 Term and 2002
Term, if either Vizacom Inc., the parent corporation of
Licensor, or Licensor enters into a strategic relationship with
respect to the Harvard Graphics products that are part of the
Software Products, and (ii) at any time after the 2002 Term for
any reason, in each case such termination to be effective sixty
days after written notice thereof to Licensee.
6.3.2 In the event aggregate Royalties do not exceed $25,000 under
this Agreement during the 2001 Term, the 2002 Term or any
succeeding twelve month period, the Licensor may terminate this
Agreement without any liability or payment.
6.3.3 Licensor shall have the right to terminate the Trademark
License granted hereunder for any reason (i) during the 2001
Term or 2002 Term, upon payment of a $45,000 termination fee to
Licensee, and (ii) after the 2002 Term, without payment of a
termination fee, such termination to be effective sixty days
after written notice thereof to Licensee.
6.4 Effect of Termination.
6.4.1 In the event of any termination, Licensee shall pay to Licensor
immediately all Royalties due up through the termination date.
6.4.2 Replication of Software Products shall immediately cease upon
termination of the Software License. Notwithstanding the
foregoing, Licensee shall have the right to distribute any
remaining inventory of Software Products for a period of three
months after termination of the Software License, except that
Licensee shall have the right to distribute any remaining
inventory and continue to perform for the remainder of the term
of existing OEM contracts, which shall have a maximum full term
of no more than two years, in effect at the time of
termination; provided that Licensee continues to pay Royalties
to Licensor.
6.4.3 Replication of HG Branded Products shall immediately cease upon
termination of the Trademark License. Notwithstanding the
foregoing, Licensee shall have the right to distribute any
remaining inventory of such products for a period of three
months after such termination, except that Licensee shall have
the right to distribute any remaining inventory and continue to
perform for the remainder of the term of existing OEM
contracts, which shall have a maximum full term of no more than
two years, in effect at the time of termination; provided that
Licensee continues to pay Royalties
to Licensor.
ARTICLE VII
CONFIDENTIALITY
7.1 Definition. Confidential Information means (a) information received by
either party relating to this Agreement; (b) information disclosing
any of the business practices of either party, as applicable,
including without limitation, Licensor's or Licensee's pricing and
marketing practices, revenue information and relationships with
licensors, authorized resellers, or customers; (c) specifications or
other technical information about or concerning the Software Products
or business models; (d) information designated by either party as
confidential in writing or, if disclosed orally, identified as
confidential at the time of disclosure; and (e) the terms and
conditions of this Agreement, but not the existence of this Agreement.
It does not include information, technical data, or know-how which is
(w) already published or available to the public other than by a
breach of this Agreement; (x) rightfully received from a third party
not in breach of any obligation of confidentiality; (y) independently
developed by personnel or agents of the receiving party without access
to the Confidential Information of the other party; or (z) produced in
compliance with applicable law or a court order, provided that the
receiving party first gives the disclosing party reasonable notice of
such law or order, provides reasonable cooperation to the disclosing
party in its efforts to lawfully limit disclosure, and gives the
disclosing party opportunity to defend and/or attempt to limit such
production.
7.2 Confidentiality. During the term of this Agreement and thereafter,
each party shall safeguard and keep confidential the other party's
Confidential Information and will not, without prior written consent,
disclose the other party's Confidential Information, in whole or in
part, except as authorized in writing. Each party agrees to protect
the Confidential Information as it would its own information of a like
nature against unauthorized use, dissemination, or publication. No use
of the Confidential Information is permitted except as authorized by
the disclosing party and provided herein. Confidential Information may
only be disclosed to agents or employees of the receiving party who
need to know such information and in those instances only to the
extent justified by that need.
7.3 Return. Upon termination of this Agreement and request of the
disclosing party, the receiving party shall return all copies of the
other party's Confidential Information to the other party or certify
in writing that all copies of the Confidential Information have been
destroyed. A party may return Confidential Information, or any part
thereof, to the other party at any time. The obligations of this
Section 7 will survive any return or destruction of the Confidential
Information.
ARTICLE VIII
ADMINISTRATIVE PROVISIONS
8.1 Entire Agreement. This Agreement represents the final, complete and
exclusive agreement between the parties concerning the matters
contemplated hereby. Any amendments or modifications to this Agreement
must be in writing and signed by both parties to this Agreement.
8.2 Counterparts. This Agreement may be executed in counterparts, and a
facsimile copy of this Agreement signed by Licensee, transmitted to
Licensor, and countersigned by Licensor shall constitute a binding
Agreement.
8.3 Severability; Waiver. This Agreement is severable and the invalidity
of any term or condition shall not affect the validity of any other
term or condition. Any delay or failure to enforce a provision of this
Agreement shall not be deemed to constitute a waiver of the same.
8.4 Governing Law; Arbitration. This Agreement shall be governed by the
laws of the United States and the State of New York (without regard to
its principles of conflicts of laws) and any legal action brought
pursuant to this Agreement shall be brought in the state or federal
courts located in the Southern District of New York. Each of the
parties hereto irrevocably consents to the exclusive jurisdiction of
any state or federal court within the State of New York, in connection
with any matter based upon or arising out of this Agreement or the
matters contemplated herein, and agrees that process may be served
upon them anywhere in the world.
8.5 Force Xxxxxx. Notwithstanding any provisions in this Agreement to the
contrary, neither party shall be liable to the other, nor shall any
breach of this Agreement occur, by reason of any delay or loss
reasonably incurred by Acts of God, fire, natural disaster,
governmental order, material shortages, war, riot, work stoppage or
strike.
8.6 Independent Contractors. The parties hereto shall for all purposes be
deemed to be independent contractors. Nothing in this Agreement shall
be construed as making either Licensor or Licensee the agent of, or in
joint venture with, the other party.
8.7 Assignment. Neither party may assign this Agreement without the
express written consent of the other party, except that no consent
shall be required in the event of a merger, consolidation or sale of
all or substantially all of the assets of either party. A change in
control of Licensee shall be deemed an assignment for purposes hereof.
The provisions of this Agreement shall inure to the benefit of and be
binding upon the parties hereto, their successors or assigns.
8.8 Notices. All notices shall be in writing and either mailed or sent by
facsimile or nationally recognized overnight courier to the parties at
the addresses noted below to the attention of the appropriate persons.
Notices may also be sent by confirmed
delivery of electronic mail when the electronic mail addresses are
known. All Royalty reports and payments will be sent to Licensor at
the address set forth below. Either party may change the address for
notices by giving notice to the other party as provided herein.
If sent to Licensor: If sent to Licensee:
Software Publishing Corporation Serif (Europe) Limited
c/o Vizacom Inc. Xxxx 00
00 Xxxx Xxxxxx Xxxxxxx Xxxxxxxxxx Xxxxxx
New York, NY 10038 Xxxxxxxxxx, XX00 0XX
Attn: Accounting Department Attn: Financial Director
Fax: 000-000-0000 Fax: 0000 000 0000
With a copy to: With a copy to:
Xxxx X. Xxxxxxx, Esq. Xxxxxx Xxxxx, Esq
Xxxxxxx & Xxxxxxxx, LLC Xxxxxxx Wareing
50 Xxxxxxx Xxxxxxxxx Blvd. Cumberland House
Xxxxxxx Xxxxx, XX 00000 00 Xxxx Xxx, Xxxxxxxxxx
Fax: 000-000-0000 XX0 0XX
Fax: 0000 000 0000
8.9 The provisions of Articles IV, V, VII and clauses 6.4, 8.4 and this
8.9 shall survive termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the Effective Date.
SERIF (EUROPE) LIMITED SOFTWARE PUBLISHING CORPORATION
By: /s/ Xxxx Xxxxx By: /s/ Xxxxxxx XxXxxxxx
-------------------------- ---------------------------
Name: Xxxx Xxxxx Name: Xxxxxxx XxXxxxxx
Title: Director Title: President
