Exhibit 10.59
SOURCE LICENSE AGREEMENT
This Source License Agreement (the "Agreement"), dated July 13, 1999, is
entered into by and between Celerity Solutions, Inc., a Delaware corporation,
with offices at 000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxxxxx, 00000
("Licensor"), and HotStatus Enterprises, Inc., a California corporation, with
offices at 00000 Xxxxxxxxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx, 00000 ("Licensee").
RECITALS
A. Licensor is the owner of certain computer software.
B. Licensee desires to obtain a license to use such software, and Licensor
desires to grant such a license, upon and subject to the terms and conditions
contained in this Agreement.
AGREEMENT
In consideration of the foregoing recitals and the mutual covenants set
forth below, the parties hereto agree as follows:
1. Definitions. For purposes of this Agreement, each of the following terms
shall have the meaning stated in this Section 1:
1.1 Licensed Software. "Licensed Software" shall mean (a) the WMS
Client Server Software, (b) the WMS COBOL Software, (c) the Xxxx Software,
and (d) the Transportation COBOL Software.
1.2 Xxxx Software. "Xxxx Software" shall mean the "Work", the "Portion
of the Foundation" and the "Development Tools", as defined in that certain
letter agreement dated June 24, 1997 between Xxxxx Xxxx and Somerset
Automation, Inc., a copy of which is attached hereto as Exhibit A.
1.3 WMS Client Server Software. "WMS Client Server Software" shall
mean the Source Code and Object Code for that certain software, the Source
Code of which is described on Exhibit B attached hereto.
1.4 WMS COBOL Software. "WMS COBOL Software" shall mean the Source
Code and Object Code for that certain software, the Source Code of which is
described on Exhibit C attached hereto.
1.5 Transportation COBOL Software. "Transportation COBOL Software"
shall mean the Source Code and Object Code for that certain software, the
Source Code of which is described on Exhibit D attached hereto.
1.6 Documentation. "Documentation" shall mean technical, user and
marketing materials pertaining to the Licensed Software, together with
other materials created by Licensor to facilitate the usage of Third Party
Tools, all as the same shall exist on the date of this Agreement (except
for the Documentation referred to in Section 3.5 below). Such materials
include, without limitation, procedures manuals, text to the on-line help,
database schematics, program specifications, functional specifications,
flow charts, white papers, published bug lists and features lists.
1.7 Enhancement. "Enhancement" shall mean (a) any new version, update
or release of the Licensed Software or the Documentation or any prior
Enhancement, (b) any change or addition that, when made or added to the
Licensed Software or Documentation or any prior Enhancement, changes its
utility, efficiency or functional capability, or (c) any change or addition
that, when made or added to the Licensed Software or Documentation or any
prior Enhancement, corrects an error, or a procedure or routine that, when
observed eliminates the adverse effect of that error on the Licensed
Software, Documentation or prior Enhancement.
1.8 Licensor Enhancements. "Licensor Enhancements" shall mean
Enhancements which are developed by Licensor.
1.9 Licensee Enhancements. "Licensee Enhancements" shall mean
Enhancements which are developed by Licensee.
1.10 Derivative Works. "Derivative Works" shall mean any Enhancement
or other work that is based upon the Licensed Software or Documentation or
a prior Derivative Work thereof, such as a revision, modification,
translation, abridgement, condensation, expansion, or any other form in
which such preexisting works may be recast, transformed, or adapted, and
that, if prepared without authorization of the owner of the copyright in
such preexisting work, would constitute a copyright infringement.
1.11 Third Party Tools. "Third Party Tools" shall mean all of the
third party software utilized by Licensor to support the creation,
development, maintenance and installation of the Licensed Software
including, without limitation, the Third Party Tools identified on Exhibit
E.
1.12 Source Code. "Source Code" shall mean computer programming code
in a form that a human, familiar with computer language, may deduce with
reasonable ease, or in an encoded machine readable form, such as
recordation on a magnetic tape or floppy disk, which can be processed by a
computer to produce a printed document that a human, familiar with computer
language, may deduce with reasonable ease.
1.13 Object Code. "Object Code" shall mean computer programming code
that results when a computer translates or processes Source Code into
machine language intermediate code that is not convenient to human
understanding of the program logic, but which is appropriate for execution
or interpretation by a computer.
1.14 Year 2000 Compliant. "Year 2000 Compliant" shall mean that (a)
the WMS Client Server Software as of the date of this Agreement accurately
processes, provides and/or receives all date/time data (including
calculating, comparing and sequencing) within, from, into and between
centuries (including the twentieth and twenty-first centuries and the years
1999 and 2000), including leap year calculations, and (b) neither the
performance nor the functionality of the WMS Client Server Software will be
adversely affected in any material manner by any dates/times, prior to, on,
after or spanning January 1, 2000.
1.15 Primary Market. "Primary Market" shall mean any business entity
or individual, except for (a) those individuals or entities, as of the date
of this Agreement, who have purchased a license from Licensor to the
Licensed Software, which are listed on Exhibit F, and (b) those individuals
and entities who are listed on the Shared Leads List by Licensor pursuant
to Section 3.4. In the event of any dispute concerning the Shared Leads
List, the parties shall make reasonable efforts within three (3) business
days to resolve such dispute with the participation of the President and/or
Chief Executive Officer of the Licensor and the Licensee, provided that, if
the parties are unable to resolve such dispute within three (3) business
days, such disputed leads shall be assigned alternatively to Licensor and
Licensee with the first such disputed lead assigned to Licensor.
1.16 Exclusive Period. "Exclusive Period" shall mean the period
commencing on the date of this Agreement and ending on the earliest to
occur of (a) the date Licensor files, or has filed against it, a petition
or other action under any federal or state bankruptcy or debtor relief
laws, or makes an assignment for the benefit of its creditors or (b) the
fifth anniversary of the date of this Agreement, or (c) the date on which
the Maximum Fees have been paid to Licensor.
2. Title.
2.1 Licensor Title. Licensee acknowledges and agrees that, as between
Licensor and Licensee, all right, title and interest in and to (a) the
Licensed Software and the Documentation, as they exist as of the date of
this Agreement, (b) all Licensor Enhancements, (c) all Derivative Works
prepared by Licensor and (d) all copyrights and other intellectual property
rights with respect to the items referred to in clauses (a), (b) and (c),
shall be owned exclusively by Licensor.
2.2 Licensee Title. Licensor acknowledges and agrees that, as between
Licensor and Licensee, all right, title and interest in and to (a) all
Licensee Enhancements, (b) all Derivative Works prepared by Licensee
(subject to Licensor's ownership of the preexisting work from which the
Derivative Work is derived, if applicable), and (c) all copyrights and
other intellectual property rights with respect to the items referred to in
clauses (a) and (b), shall be owned exclusively by Licensee.
3. Grant of License.
3.1 Grant of License by Licensor. Subject to the terms and conditions
contained in this Agreement, Licensor hereby grants to Licensee a
perpetual, worldwide, irrevocable, non-exclusive, assignable, transferable
and sub-licensable license to (a) use (for any purpose), execute,
reproduce, market and distribute the Licensed Software and Documentation,
all Licensee Enhancements and other Derivative Works, and (b) make Licensee
Enhancements and other Derivative Works.
3.2 Limitation on Exercise of License. Notwithstanding Section 3.1
above, Licensee shall not, during the Exclusive Period, without the express
prior written consent of Licensor, directly or indirectly, license,
sublicense, sell, assign or otherwise transfer the Licensed Software, or
any Licensee Enhancements to (a) any individual or business entity which is
not in the Primary Market or (b) any business entity or individual that is
a Direct Competitor of Licensor. For purposes of the foregoing, the term
"Direct Competitor" shall mean an individual or entity that markets or
distributes application software with functions similar to the licensed WMS
Client Server Software or the WMS COBOL Software. A Direct Competitor shall
not include individuals or entities which utilize the Licensed Software
exclusively for their own internal purposes.
3.3 Exclusivity. During the period commencing on the date of this
Agreement and ending on the fifth anniversary of the date of this
Agreement, Licensor shall not, without the express prior written consent of
Licensee, directly or indirectly engage in the marketing, distribution or
licensing of the Licensed Software to (a) any individual or business entity
which has purchased a license from Licensee to the Licensed Software or any
Licensee Enhancements, (b) those individuals or business entities, who,
after the date of this Agreement, have been listed by the Licensee on the
Shared Leads List in accordance with Section 3.4.
3.4 Shared Leads List. Those individuals or business entities, who,
during the Exclusive Period, have been verbally contacted by one party to
this Agreement prior to the other party to this Agreement and such contact
has shown reasonable interest in purchasing a license to the Licensed
Software, or in the case of the Licensor, any Licensor Enhancements, or in
the case of the Licensee, any Licensee Enhancements, shall be placed on a
shared leads list (the "Shared Leads List") by the Licensor or the
Licensee, as the case may be. The Shared Leads List shall include the
individuals or business entities contacted, the date of first contact, who
was contacted, and the level of interest by such contact. Any business
entity or individual which is placed on the Shared Leads List by the
Licensor or the Licensee, as the case may be, and which has not purchased a
license of the Licensed Software or the Licensor Enhancements or Licensee
Enhancements as aforesaid within nine (9) months from having been placed on
the Shared Leads List shall expire and shall be deemed for all purposes
following such date to be removed from such list. Following such removal
such business entity or individual may be placed on the Shared Leads List
by the party which did not last place such entity or individual on the
Shared Leads List (or, following the expiration of thirty days following
such removal, by the party which last placed such entity on the Shared
Leads List) .. Notwithstanding the foregoing, in no event shall the
Licensor or Licensee list on the Shared Leads List at any one time more
than the greater of forty (40) individuals or entities or twenty (20)
individuals or entities per full time sales or full time sales support
persons employed by the Licensor or the Licensee, as the case may be. The
initial Shared Leads List is attached hereto as Exhibit G.
3.5 Windows NT Version of Licensed Software. When and if developed by
the Licensor, the Licensor shall promptly deliver to the Licensee the
Windows NT Version of the Licensed Software and related Documentation on
the same terms and conditions as are applicable to the Licensed Software
and Documentation hereunder and following any such development and
delivery, the term "Licensed Software" and "Documentation" shall include
for all purposes the Windows NT Version thereof and related Documentation
respectively.
4. General Terms.
4.1 Term. The term of this Agreement shall commence on the date of
this Agreement and shall continue in perpetuity (or for the longest period
of time otherwise permitted by law), unless sooner terminated by Licensee
as provided in Section 4.2 below.
4.2 Acceptance of Licensed Software; Termination. Within thirty (30)
days following the date of this Agreement, Licensor shall deliver to
Licensee (a) copies of the Licensed Software (in both Object Code and
Source Code form), including the most recent version thereof and all prior
versions, and (b) copies of the Documentation. Licensee shall have a period
of time not to exceed sixty days following the delivery of the foregoing to
review the same. In the event that Licensee determines that the Licensed
Software and Documentation are satisfactory, Licensee shall provide
Licensor with written notice of acceptance thereof. Upon receipt of
Licensee's written notice of acceptance, Licensor and Licensee shall
promptly execute and deliver a Forbearance Agreement in the form attached
hereto as Exhibit H. In the event that (A) Licensee determines that the
Licensed Software and/or Documentation is/are unsatisfactory for any
reason, in its sole and absolute discretion, or (B) Licensor, upon receipt
of a written notice of acceptance, shall fail to promptly execute and
deliver the foregoing agreements, Licensee may terminate this Agreement
upon delivery to Licensor of written notice of termination.
4.3 License Fees.
(a) In consideration of the rights granted to Licensee under this
Agreement, Licensee shall pay a license fee to Licensor of $200,000 (the
"Initial Fee"), plus royalty fees ("Royalty Fees") payable based on the
licensing fees booked by Licensee from its customers for the Licensed
Software, as follows:
Year 1 = 50% of licensing fees booked by Licensee
Year 2 = 40% of licensing fees booked by Licensee
Year 3 = 30% of licensing fees booked by Licensee
Year 4 = 20% of licensing fees booked by Licensee
Year 5 = 10% of licensing fees booked by Licensee
(b) For purposes of this Agreement, "Year 1" shall be the twelve month
period commencing on the date of this Agreement, "Year 2" shall be the
twelve month period commencing on the first anniversary of the date of this
Agreement, "Year 3" shall be the twelve month period commencing on the
second anniversary of the date of this Agreement, and so on. From and after
Year 5, all of the rights granted to Licensee under this Agreement shall be
fully paid up and royalty-free.
(c) Notwithstanding the foregoing, if Licensee has failed to pay
Royalty Fees to Licensor in the amount of not less than an aggregate of
$500,000 prior to the end of Year 5, the Licensee shall continue to pay
Royalty Fees to Licensor at the rate of 10% of licensing fees actually
received by Licensee in each year subsequent to the end of Year 5 until
such time as the aggregate Royalty Fees paid by Licensee to Licensor
hereunder shall equal $500,000. Notwithstanding any of the terms or
provisions of this Agreement, in no event shall the aggregate of the
Initial Fee and the Royalty Fees to be paid by Licensee to Licensor
hereunder exceed $1,750,000 (the "Maximum Fees"). For purposes of the
foregoing, amounts paid to Xxx Xxxxxxxxx pursuant to Section 4.5 below and
amounts withheld pursuant to Section 5 and/or Section 10.2 shall be deemed
to be Royalty Fees paid to the Licensor.
(d) Licensee will pay the Initial Fee through a reduction in the
outstanding amount owed by Licensor under that certain Non-Negotiable
Promissory Note and Security Agreement dated December 8, 1997 in the
original principal amount of $448,116 executed by Licensor in favor of Xxx
Xxxxxxxxx (the "Xxxxxxxxx Note"). For purposes of this Agreement, licensing
fees shall be "booked" by Licensee upon the execution by Licensee of a
binding agreement with a third party with respect to the Licensed Software,
provided, however, that Licensee shall pay the Royalty Fees related to such
booked revenue within ten (10) days following Licensee's receipt from its
customers of the licensing fees to which such Royalty Fees relate.
4.4 Minimum Royalty Fees. Notwithstanding paragraph (a) of Section 4.3
above, but subject to paragraph (c) of Section 4.3, the minimum per server
Royalty Fee during Years 1 through 5 shall not be less than the amounts
specified on Exhibit I attached hereto based upon the year in which the
license fee in question is booked.
4.5 Earn-Out Payments to Xxx Xxxxxxxxx. Notwithstanding the foregoing,
Licensee shall deduct and pay to Xxx Xxxxxxxxx, as payments on the
Xxxxxxxxx Note, 50% of the Royalty Fees otherwise payable to Licensor,
until the Xxxxxxxxx Note has been paid in full.
5. Year 2000 Complaint. Licensor shall use reasonable efforts to correct
errors in the WMS Client Server Software and the Xxxx Software which causes the
WMS Client Server Software and the Xxxx Software to be non-Year 2000 Complaint.
Upon discovering any such error, Licensee and Licensor shall submit a written
detailed report to the other party describing such error. Licensor shall then
use reasonable efforts to correct the error, provided, however, that if Licensor
acknowledges in writing its inability to correct any error or fails to correct
such error within a reasonable time following the discovery thereof, the
Licensee may develop License Enhancements to correct such error and offset the
reasonable cost of such error correction against Royalty Fees otherwise payable
by Licensee to Licensor pursuant to Section 4.3. If Licensee develops such
Licensee Enhancements, Licensee shall deliver the same to Licensor without cost
to Licensor (other than the offset to the Royalty Fees referred to above) upon
Licensor's execution and delivery to Licensee of a license agreement with
respect thereto in such form as may reasonably be requested by Licensee.
6. Protection of Proprietary Rights.
6.1 Confidentiality Obligations of Licensee; Copyright Notices.
Licensee shall protect the confidentiality of the Licensed Software, the
Documentation, and all Licensor Enhancements, using at least as great a
degree of care as it uses in protecting its own highly valuable and
confidential trade secrets, but no less than a reasonable degree of care
under the circumstances. Licensee shall not remove from any copies of the
Licensed Software, the Documentation, or any Licensor Enhancements any
copyright notice of Licensor appearing thereon, and shall include such
copyright notice at the appropriate place on each copy of the Licensed
Software, the Documentation, and all Licensor Enhancements made by
Licensee.
6.2 Trademarks. Licensee acknowledges that Licensor shall continue to
exclusively own all right, title and interest in and to all trademarks
currently used by Licensor in connection with the Licensed Software and the
Documentation and Licensee further acknowledges and agrees that it shall
not, except as expressly authorized by this Agreement,in any way utilize
such trademarks without the express written consent of Licensor.
Notwithstanding the foregoing but subject to the terms and conditions
contained in this Agreement, Licensor hereby grants Licensee a
non-exclusive, assignable, transferrable and sub-licensable license to use,
for a period of two (2) years from the date of this Agreement, any and all
trademarks and logos of Licensor, which Licensor has heretofore used in
connection with the marketing, distribution and/or licensing of the
Licensed Software. Following such two-year period, Licensee shall cease the
use of all such trademarks and logos and shall cause any third party to
which Licensee has licensed, sublicensed, assigned or otherwise transferred
the right to use such trademarks to also cease the use of the same.
6.3 Confidentiality Obligations of Licensor; Copyright Notices.
Licensor shall protect the confidentiality of all Licensee Enhancements,
using at least as great a degree of care as it uses in protecting its own
highly valuable and confidential trade secrets, but no less than a
reasonable degree of care under the circumstances. Licensor shall not
remove from any copies of the Licensee Enhancements any copyright notice of
Licensee appearing thereon, and shall include such copyright notice at the
appropriate place on each copy of the Licensee Enhancements made by
Licensor.
6.4 Residuals. Each of the parties acknowledges that during the course
of the exercise of the rights and obligations granted or imposed by this
Agreement the parties will be given access to confidential information
belonging to each other. Each of the parties shall be free, either during
the term of this Agreement or thereafter, to use for any purpose the
"residuals" resulting from access to or work with such confidential
information. The term "residuals" for purposes of this Agreement shall mean
non-confidential information which may be retained by either party,
including non-confidential ideas, concepts, know-how or techniques
contained therein. Accordingly, but without limiting the generality of the
foregoing, either party shall be free to use "residuals" to develop
software which is similar to and/or competitive with software belonging to
either party to which either party is given access during the course of the
exercise of the rights and obligations granted or imposed under this
Agreement, and the other party shall neither have any right, title or
interest therein, nor shall it be entitled to receive royalties with
respect thereto.
6.5 Limitations on Confidentiality. The restrictions set forth in
Sections 6.1 and 6.3 above respecting confidentiality shall not apply to
any material which is (a) rightfully in the public domain; (b) rightfully
received by the receiving party from a third party without any obligation
of confidentiality imposed by the owner of the material in question or
applicable law; (c) rightfully known to the receiving party without any
limitation on use or disclosure prior to its receipt from the other party;
(d) independently developed by personnel of the receiving party; or (e)
generally made available to third parties by the owner of the material in
question without restriction on disclosure. In the event that either party
is requested or required by any tribunal, court or governmental agency (by
oral questions, interrogatories, requests for information or documents,
subpoena, civil investigative demand, formal request or similar process) to
disclose the confidential material of the other party, the party who has
been so requested or required shall provide the other party with prompt
notice of such request(s) so that such party may seek an appropriate
protective order and/or waive the other party's compliance with the
provisions of Section 6.1 or 6.3, as the case may be. If, in the absence of
a protective order or the receipt of a waiver from the owner of the
material in question, the other party is nevertheless advised by its
counsel in writing that it is required under applicable law to disclose the
information so requested to such tribunal, court or governmental agency,
such party may disclose such information to such tribunal, court or
governmental agency without liability under this Agreement.
7. Competitive Software; Competition. Licensor acknowledges that Licensee
may at any time after the date of this Agreement develop, market, distribute
and/or license software products similar to and/or competitive with the Licensed
Software, the Licensor Enhancements and/or the Licensee Enhancements, and that
nothing contained in this Agreement shall limit in any way Licensee's right to
do so.
8. Disclaimer of Warranties.
8.1 Disclaimer of Licensor's Warranties. Licensee acknowledges and
agrees that, except as stated in Section 9 below and Section 5 above, the
Licensed Software and Documentation will be provided to Licensee "as is."
EXCEPT AS SPECIFICALLY PROVIDED, IN THIS AGREEMENT LICENSOR EXPRESSLY
DISCLAIMS ANY AND ALL WARRANTIES PERTAINING TO THE LICENSED SOFTWARE AND
THE DOCUMENTATION, OR THE USE THEREOF, INCLUDING BUT NOT LIMITED TO, ALL
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
9. Representations and Warranties.
9.1 Representations and Warranties by Licensor. Licensor hereby
represents and warrants to Licensee that (a) Licensor is the sole owner of
all right, title and interest in and to the Licensed Software and the
Documentation as the same exist as of the date of this Agreement, and of
all copyrights and other intellectual property rights with respect thereto,
(b) Licensor will be the sole owner of all right, title and interest in and
to any and all Licensor Enhancements which may hereafter be delivered by
Licensor to Licensee, and of all copyrights and other intellectual property
rights with respect thereto, and (c) Licensee's exercise of the rights
granted to it under this Agreement with respect to the Licensed Software,
the Documentation and all Licensor Enhancements will not violate any
copyright or other intellectual property right of any other person or
entity.
10. Additional Covenants.
10.1 Hiring of Employees. Licensor and Licensee each acknowledge that
it would receive substantial value and that the other would be deprived of
the benefits of its work force if it were to hire any person who is, as of
the date of this Agreement, a full-time employee of the other party, unless
at least twelve months shall have elapsed between the termination of such
person's employment with one party and his or her hiring by the other
party. It is further acknowledged that a breach of this Section 10.1 would
result in injury to the non-breaching party that would be difficult or
impossible to accurately ascertain. Therefore, because of the impossibility
of ascertaining actual damages, it is agreed that in the event of a breach
of this Section 10.1, the breaching party will pay to the other party with
respect to each such breach the sum of Fifty Thousand Dollars ($50,000), as
liquidated damages and not as a penalty. The parties agree that the amount
of liquidated damages specified herein represents a reasonable
approximation of the damages which would be incurred as a result of the
breach of this Section 10.1.
10.2 Third Party Tools. Licensor shall, commencing on the date of this
Agreement and ending six months after the date of this Agreement, update
all of its Third Party Tools such that the releases of the same utilized by
Licensor are available to Licensee from, and supported by, the vendors of
all such Third Party Tools, and shall ensure that the Licensed Software has
not been adversely affected by such upgrades. If Licensor is unable to
modify the Licensed Software to compile with the Third Party Tools that are
supported as of the date of this agreement by the Third Party Tools
vendors, then the Licensee may develop Licensee Enhancements to the
Licensed Software to enable it to work with the supported Third Party Tools
, and Licensee shall offset the cost of such Licensee Enhancements from any
Royalty Fees (see Section 4.3), and such offsets will terminate upon the
fifth anniversary of the date of this Agreement. For purposes of the
foregoing sentence, "cost" shall mean the actual cost of the employee 's
salary and benefits or the actual cost of the fees for consultants for the
reasonable time of developing the Licensee Enhancements to enable the
Licensed Software to compile with the supported Third Party Tools. If the
Licensee is unable to obtain supported Third Party Tools as a result of any
Third Party Tools upgrade issues, mentioned herein, the Licensor will
provide to the Licensee a transferred license for such Third Party Tools to
be reimbursed by the Licensee at the Licensor's cost for such license. If
Licensee develops Licensee Modifications as contemplated by the second
sentence of this Section 10.2, Licensee shall deliver such Licensee
Enhancements to Licensor without cost to Licensor (other than the offset to
Royalty Fees referred to above) upon Licensor's execution and delivery to
Licensee of a license agreement with respect thereto in such form as may
reasonably be requested by Licensee.
10.3 Termination of Prior Agreement. Licensor hereby terminates in its
entirety, effective as of the date of this Agreement, that certain
Consulting Agreement dated December 8, 1997 entered into by Licensor and
Xxx Xxxxxxxxx.
10.4 Customer Site Visits and References, and Support. Licensor and
Licensee each acknowledge the value of providing to each other customer
site visits and references, from each other's customers, in the sales and
marketing of the Licensed Software, the Licensor Enhancements and the
Licensee Enhancements. Therefore, both parties agree, that for a period of
1 year from the date of this Agreement, upon request and reasonable notice,
and with the customer's approval, to provide such customer site visits and
references to each other. Both parties also agree, for a period of 1 year
from the date of this Agreement, upon request and reasonable notice, to
provide the other party with sales and marketing and technical assistance
with respect to the sales and marketing of the Licensed Software, the
Licensor Enhancements and the Licensee Enhancements.
11. Indemnification.
11.1 Indemnification by Licensor. Licensor shall indemnify, defend,
and hold Licensee harmless from and against any and all losses,
liabilities, claims, obligations, costs and expenses, including but not
limited to reasonable attorneys' fees, suffered or incurred by Licensee as
the result of the inaccuracy of any representation or warranty made by
Licensor in this Agreement, or the breach by Licensor of any of its
covenants or obligations under this Agreement; provided, however, that in
no event shall Licensor's liability hereunder exceed $200,000.
11.2 Indemnification by Licensee. Licensee shall indemnify, defend,
and hold Licensor harmless from and against any and all losses,
liabilities, claims, obligations, costs and expenses, including but not
limited to reasonable attorneys' fees, suffered or incurred by Licensor as
the result of the inaccuracy of any representation or warranty made by
Licensee in this Agreement, or the breach by Licensee of any of its
covenants or obligations under this Agreement.
12. Miscellaneous.
12.1 Modification. No amendment or addition to, or modification of,
any provision contained in this Agreement shall be effective unless fully
set forth in writing signed by both of the parties hereto.
12.2 Attorneys' Fees. In the event of any arbitration or proceeding
arising out of or related to this Agreement, the prevailing party shall be
entitled to recover from the other party all of the prevailing party's
costs and expenses incurred in connection with such arbitration or
proceeding, including court costs and reasonable attorneys' fees.
12.3 Choice of Law. This Agreement shall be governed by and construed
under the laws of the State of Delaware, irrespective of such state's
choice-of-law principles.
12.4 Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof, and is
the final, complete and exclusive expression of the terms and conditions
thereof. All prior or contemporaneous agreements, representations,
negotiations and understandings of the parties hereto, oral or written,
express or implied, are hereby superseded and merged herein.
12.5 Captions. The captions of the sections and subsections of this
Agreement are inserted solely for convenience of reference and are not a
part of and are not intended to govern, limit or aid in the construction of
any term or provision hereof.
12.6 General Interpretation. The terms of this Agreement have been
negotiated by the parties hereto and the language used in this Agreement
shall be deemed to be the language chosen by the parties hereto to express
their mutual intent. This Agreement shall be construed without regard to
any presumption or rule requiring construction against the party causing
such instrument or any portion thereof to be drafted, or in favor of the
party receiving a particular benefit under the agreement. No rule of strict
construction will be applied against any person.
12.7 Notices. All notices, requests, demands, and other communications
required to or permitted to be given under this Agreement shall be in
writing and shall be conclusively deemed to have been duly given (i) when
hand delivered to the other party; or (ii) when received when sent by telex
or facsimile at the address and number set forth below (provided, however,
that notices given by facsimile shall not be effective unless either (a) a
duplicate copy of such facsimile notice is promptly given by depositing the
same in a United States post office with first-class postage prepaid and
addressed to the parties as set forth below, or (b) the receiving party
delivers a written confirmation of receipt for such notice either by
facsimile or any other method permitted under this Section; additionally,
any notice given by telex or facsimile shall be deemed received on the next
business day if such notice is received after 5:00 p.m. (recipient's time)
or on a nonbusiness day); or (iii) three (3) business days after the same
have been deposited in a United States post office with first class or
certified mail return receipt requested postage prepaid and addressed to
the parties as set forth below; or (iv) the next business day after the
same have been deposited with a national overnight delivery service
reasonably approved by the parties (Federal Express and DHL WorldWide
Express being deemed approved by the parties), postage prepaid, addressed
to the parties as set forth below with next-business-day delivery
guaranteed, provided that the sending party receives a confirmation of
delivery from the delivery service provider.
If to Licensor:
Celerity Solutions, Inc.
000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: Chief Executive Officer
FAX (000) 000-0000
If to Licensee:
HotStatus Enterprises, Inc.
00000 Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxx Xxxxxxxxx
FAX (000) 000-0000
Each party shall make an ordinary, good faith effort to ensure that it will
accept or receive notices that are given in accordance with this Section,
and that any person to be given notice actually receives such notice. A
party may change or supplement the addresses given above, or designate
additional addresses, for purposes of this Section by giving the other
party written notice of the new address in the manner set forth above.
12.8 Relationship of Parties. Each party acknowledges that it is an
independent entity and is not subject to the control of the other party in
any manner except as otherwise expressly provided herein. Nothing contained
herein shall be construed to constitute the parties as partners or joint
venturers, or to render either party liable for any of the debts or
obligations of the other party. Neither party has any authority to bind the
other party in any manner whatsoever except as otherwise expressly provided
herein.
12.9 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original but all of which
taken together shall constitute but one and the same instrument.
12.10 Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
heirs, representatives, successors and assigns, provided, however, that
during the Exclusive Period, Licensee may not assign this Agreement or any
right to the Licensed Software to any Direct Competitor.
IN WITNESS WHEREOF, the parties hereto have executed this Source License
Agreement.
CELERITY SOLUTIONS, INC.
By:______________________________________
Its:______________________________________
HOTSTATUS ENTERPRISES, INC.
By:_______________________________________
Its:______________________________________
The undersigned acknowledges and agrees (i) that
the payment of the Initial Fee referenced in
Section 4.3 shall be paid by a reduction of the
outstanding amount owed on the Xxxxxxxxx Note,
(ii) to accept the payments referenced in Section
4.5 in satisfaction of amounts due under the
Xxxxxxxxx Note and (iii) to be bound by the terms
of Section 10.3.
______________________________________
Xxx Xxxxxxxxx
EXHIBIT A
LETTER AGREEMENT WITH XXX XXXX DATED JUNE 24, 1997
This exhibit was not considered material information and therefore has not been
included in the filing July 13, 1999 10K filing.
EXHIBIT B
DESCRIPTION OF WMS CLIENT SERVER SOFTWARE
The WMS Client Server Software is all of the client-server software that
Celerity obtained through the acquisition of Somerset Automation, Inc., on
December 8, 1997, plus all of the subsequent versions which have been developed
from the date of that acquisition through the date of this Agreement. Without
limiting the generality of the foregoing, the WMS Client Server Software is
further defined, without any limitation, as a system that (a) provides receiving
through shipping functionality, in paper and/or radio frequency modes, for the
management of material and labor throughout a warehouse and/or multiple
warehouses from one computer, (b) transfers information with various customer
systems either through a customer specific interface or as a non-custom
parameter file based and real-time driven interface, (c) interfaces with
material handling devices such as conveyors, carousels, hand held, and bar code
equipment, (d) utilizes many Third Party Tools for the development and
maintenance of its versions, and (e) incorporates all of the functionality at
the Licensor's past and/or current customers.
Capitalized terms which are used in this Description of WMS Client Server
Software and which are not otherwise defined herein shall have the meaning given
to them in the Agreement.
EXHIBIT C
DESCRIPTION OF WMS COBOL SOFTWARE
The WMS COBOL Software is all of the COBOL software that Celerity obtained
through the acquisition of Somerset Automation, Inc., on December 8, 1997, plus
all of the subsequent versions which have been developed from the date of that
acquisition through the date of this Agreement. Without limiting the generality
of the foregoing, the WMS COBOL Software is further defined, without any
limitation, as a system that (a) provides receiving through shipping
functionality, in paper and/or radio frequency modes, for the management of
material and labor throughout a warehouse and/or multiple warehouses from one
computer, (b) transfers information with various customer systems either through
a customer specific interface or as a non-custom standard Electronic Data
Interchange interface, (c) interfaces with material handling devices such as
conveyors, carousels, hand held, and bar code equipment, (d) interfaces in both
real time and batch mode with the Transportation COBOL Software, (e) utilizes
many Third Party Tools for the development and maintenance of its versions, and
(f) incorporates all of the functionality at the Licensor's past and/or current
customers.
Capitalized terms which are used in this Description of WMS COBOL Software
and which are not otherwise defined herein shall have the meaning given to them
in the Agreement.
EXHIBIT D
DESCRIPTION OF TRANSPORTATION COBOL SOFTWARE
The Transportation COBOL Software is all of the COBOL software that
Celerity obtained through the acquisition of Somerset Automation, Inc., on
December 8, 1997, plus all of the subsequent versions which have been developed
from the date of that acquisition through the date of this Agreement. Without
limiting the generality of the foregoing, the Transportation COBOL Software is
further defined, without any limitation, as a system that (a) provides carrier
selection through customer freight invoicing functionality for the management of
transportation vehicles and labor throughout a transportation operation and/or
multiple transportation operations from one computer, (b) transfers information
with various customer systems through a non-custom parameter file based standard
Electronic Data Interchange interface, (c) interfaces in both real time and
batch mode with the WMS COBOL Software, (d) utilizes many Third Party Tools for
the development and maintenance of its versions, and (e) incorporates all of the
functionality at the Licensor's past and/or current customers.
Capitalized terms which are used in this Description of Transportation COBOL
Software and which are not otherwise defined herein shall have the meaning given
to them in the Agreement.
EXHIBIT E
THIRD PARTY TOOLS
Tool Name Tool Description Purpose
Oracle 7.3.x Relational Database WMS Server Engine
Personal Oracle 7.3.x Relational Database for Laptop WMS Server Engine for demos on Laptop
Delphi 3.02 Development Version Client Development Environment WMS Client
SQR 4.3 Visual Scribe Report writer WMS Reports
Microsoft Visual C++ Programming Language WMS RF
Pro-C Compiler 2.2.4 Pre Compiler for C WMS RF to pre-compile SQL based C code into C
code
Vermont Views Libraries 4.05 Emulation package WMS RF
WinRunner 5.1 Automated Testing Testing
XXXXX Version 4 Database documentation Documentation/printouts of the database
schema and relationships
Star Team Version 4 Version Control Version Control
SQL Navigator Oracle PL/SQL debugger Debugging PL/SQL code running on the server
PL/SQL Oracle Debugger Oracle PL/SQL debugger Debugging PL/SQL code running on the server
Doc to Help Online Help documentation Tool Creation of online documentation for help
screens integrated into the application
ACU-COBOL 85 Programming language Development of the ACU-COBOL based products
TCAL Telxon hand held programming language Development of the TELXON hand helds
KEDIT DOS Editor for the programming language Text editor used to create and modify the
COBOL code
RCS Version Control Software Version Control for the ACU-COBOL applications
MKS Toolkit UNIX environment emulation for DOS and Creates a UNIX shell environment for creating
Windows shell scripts and tools in a DOS or Windows
environment that run in a UNIX environment
Exceed Terminal Emulation Package Allows PC's to emulate different types of
terminals for access to servers running
operating systems such as UNIX
Visio Professional Flow charting tool Software to assist in the creation of flow
charts
EXHIBIT F
CURRENT LICENSEES
This exhibit was not considered material information and therefore has not been
included in the filing July 13, 1999 10K filing.
EXHIBIT G
INITIAL SHARED LEADS LIST
This exhibit was not considered material information and therefore has not been
included in the filing July 13, 1999 10K filing.
EXHIBIT H
FORBEARANCE AGREEMENT
This exhibit was not considered material information and therefore has not been
included in the filing July 13, 1999 10K filing.
EXHIBIT I
MINIMUM ROYALTY FEES
Products Year 1 Year 2 Year 3 Year 4 Year 5
UNIX-based Radio Frequency Enabled WMS $30,000 $24,000 $18,000 $12,000 $ 6,000
UNIX-based Non-Radio Frequency Enabled WMS $22,500 $18,000 $13,500 $ 9,000 $ 4,500
NT Radio Frequency Enabled WMS $22,500 $18,000 $13,500 $ 9,000 $ 4,500
NT Non-Radio Frequency Enabled WMS $15,000 $12,000 $ 9,000 $ 6,000 $ 3,000
