EXHIBIT 10.9
SOFTWARE LICENSE AGREEMENT
This Software License Agreement (this "AGREEMENT") is made as of February
15, 2003, by and between CodeFire Acquisition Corp., a California corporation
with its principal place of business at 0000 X. Xxxxxxxxx Xxxx, #000, Xxxxxxx,
Xxxxxxx 00000 ("LICENSOR") and Teknik Digital Arts Inc., a Nevada corporation
with its principal place of business at 0000 XxxXxxxxx Xxxx., #000, Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000 ("LICENSEE") with respect to the Software (as defined in
Section 3 below).
RECITALS
Licensor produces and licenses the Software;
Licensor wishes to grant to Licensee and Licensee wishes to receive from
Licensor, all rights in the Software necessary to grant to others the right to
install and use the Software;
Licensor owns or has the right to grant a license to the Software of the
scope granted herein; and
Licensee desires to license the Software subject to the terms and
conditions of this Agreement.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, and in consideration
of the promises and agreements herein contained, Licensor and Licensee agree as
follows:
1. DEFINITIONS. As used in this License, the following terms shall have
the indicated meanings:
(i) "COPYRIGHTS" shall mean all copyright rights, copyrights,
copyright registrations, certificates of copyright and copyrighted interests
owned or controlled by Licensor throughout the world presently or in the future
during the term of this Agreement and which cover or pertain to the Software.
(ii) "DEMO VERSION" means a non-functional version of the Software
that is used for the purpose of demonstrating the look and feel of the Software.
(iii) "END USER" means an end user customer who has purchased from
Licensee a copy of or grant of a right of access to the Software.
(iv) "ERROR CORRECTIONS" means bug fixes, error fixes, work arounds,
code corrections, and comparable solutions to defects and malfunctions of the
Software.
(v) "INTELLECTUAL PROPERTY" shall mean all forms of intellectual
property owned or controlled by Licensor presently or in the future during the
term of this License, including, without limitation, Patents, Copyrights and
Trade Secrets.
(vi) "KNOW-HOW" shall mean all technical information, whether
included in or derived from specifications, logic architectures, flow charts,
algorithms, manuals, drawings, procedures, processes, software (including object
and source code), firmware or other tangible embodiments of information,
developed, owned or controlled by Licensor presently or in the future during the
term of this Agreement and which relate to the concept, function, research,
development, manufacture, testing, use and operation, maintenance and repair of
the Software. The term "Know-How" shall also mean the know-how of third parties
to which Licensor has, or may be given, the right while this Agreement is in
effect to grant licenses or sublicenses to Licensee under such rights without
making additional payments. In the event Licensor becomes aware, subsequent to
the effective date of this License, of any know-how that falls within the
definition of Know-How as given above, then such know-how shall be considered
for all purposes as Know-How under this Agreement and shall be subject to all
provisions of this Agreement pertaining to Know-How.
(vii) "NET RECEIPTS" means Licensee's actual billing price charged
to its direct End User customers for the Software, less: (A) customary trade
discounts and customary allowances actually granted; (B) royalties or other
license fees payable to third parties; (C) customs duties, withholding taxes and
other governmental levies (other than income tax); and (D) any returns and
transportation charges on returns.
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(viii) "PATENTS" shall mean all letters patent or equivalent rights,
applications for such patents or rights, ornamental or industrial designs and
utility models, and applications for such designs or models granted or issued to
Licensor or filed by Licensor anywhere in the world, which Licensor presently or
in the future during the term of this Agreement may own, or is or may be
entitled to dispose of, and which pertain to or are usable with the Software.
The term "Patents" shall also mean the patents or equivalent rights of third
parties to which Licensor has, or may be given, the right while this Agreement
is in effect to grant licenses or sublicenses to Licensee under such rights
without making additional payments.
(ix) "SUPPORT" means Technical Support and Error Corrections,
collectively.
(x) "TECHNICAL SUPPORT" means the support obligations described in
Section 2.5(ii).
(xi) "TECHNOLOGY" shall mean all writings, works and copyrightable
subject matter, inventions, discoveries and patentable subject matter, Trade
Secrets, Know-How and technology of Licensor relating to all aspects of the
Software, including the concept, function, experimentation, research,
development, manufacture, marketing, maintenance, operation and use of the
Software which Licensor owns or creates in the future during the term of this
Agreement or which Licensor has acquired or acquires in the future during the
term of this Agreement.
(xii) "THIRD-PARTY INTELLECTUAL PROPERTY RIGHTS" means all
copyrights, patents and patent rights, trademarks, service marks, trade dress
rights, trade secrets, and other proprietary rights in and to the subject matter
of such rights, owned by a person other than Licensor.
(xiii) "TRADE SECRETS" shall mean all trade secrets and trade secret
rights of Licensor arising under the common law, state law, federal law and laws
of foreign countries which Licensor presently or in the future during the term
of this Agreement may own, or is or may be entitled to dispose of, and which
pertain to or are usable with the Software. The term "Trade Secrets" shall also
mean the trade secrets and trade secret rights of third parties to which
Licensor has, or may be given, the right while this Agreement is in effect to
grant licenses or sublicenses to Licensee under such rights without making
additional payments. In the event Licensor becomes aware, subsequent to the
effective date of this License, of any trade secret or trade secret right that
falls within the definition of Trade Secret as given above, then such trade
secret or trade secret right shall be considered for all purposes as a Trade
Secret under this Agreement and shall be subject to all provisions of this
Agreement pertaining to Trade Secrets.
2. LICENSE AND OPTION TO BUY.
2.1 GRANT. Licensor hereby grants Licensee under the Technology and
Intellectual Property an exclusive license with respect to the Software, with
the right to grant one or more sublicenses, according to the terms and
conditions of this Agreement.
2.2 RIGHTS OF LICENSEE. Licensee may make, have made, use, offer to sell,
sell, import, reproduce, copy, embed and incorporate with other software,
distribute, vend, modify, translate, prepare derivative works based upon,
display, perform and otherwise exploit the Software without the consent of
Licensor and may grant one or more sublicenses of the same or lesser scope to
others without the consent of Licensor.
2.3 INTERNAL USE. Licensor hereby grants to Licensee a worldwide,
exclusive, royalty-free license to use and duplicate the Software as needed for
manufacturing purposes and internal use purposes, including but not limited to
the following: lab testing and quality assurance, product support, on-line and
off-line demonstrations to customers, compatibility testing and analysis,
customized alteration of the installation script, general use of the product by
Licensee for purposes of improving Licensee proficiency with the Software, and
use in Licensee's own internal production systems.
2.4 LICENSES AND SUPPORT TO END USERS. All licenses to End Users to use or
access the Software shall be between Licensee, as licensor, and the End User, as
licensee.
2.5 SUPPORT OBLIGATIONS.
(i) The parties shall cooperate in good faith to provide Support to
End Users of the Software. Licensor shall provide Support for the Software to
Licensee, and Licensee shall provide Support for the Software to End Users. The
parties intend that Licensee shall, to the maximum practical extent, receive all
initial contact from End Users regarding Technical Support and Error Corrections
for the Software and shall use its reasonable best
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efforts to provide such Technical Support, and that Licensor shall provide to
Licensee such Support as may be necessary or appropriate for Licensee to meet
its Support obligations to End Users.
(ii) At no additional cost to Licensee, Licensor shall: (A)
designate an individual or individuals and telephone numbers as main points of
contact at Licensor for telephone hotline support for Licensee; and (B) provide
such telephone hotline support from 9:00 a.m. to 5:00 p.m. PST, Monday through
Friday. Licensor shall use its best efforts to respond to all telephone
inquiries immediately, and shall respond no later than twenty-four (24) hours
after the initial inquiry. Licensor shall accept telephone hotline calls from
Licensee.
2.6 OPTION TO BUY. Licensee shall have the right at any time during the
term of this Agreement to purchase from Licensor all but not less than all of
Licensor's ownership interest in the Software for a purchase price of two
million dollars ($2,000,000.00) (the "Option"). Closing for such purchase shall
take place at Licensee's principal place of business no later than thirty (30)
days after Licensor's receipt of written notice from Licensee that Licensee has
elected to the exercise the Option, at which closing Licensee shall deliver the
purchase price to Licensor and Licensor shall deliver to Licensee a xxxx of sale
and other documentation reasonably requested by the Licensee to reflect the
transfer and assignment of all of Licensor's right, title and interest in the
Software to Licensee. Such xxxx of sale shall contain warranties that Licensor
is the owner of the Software and that the Software does not and shall not
infringe any Third-Party Intellectual Property Rights.
3. DELIVERY OF SOFTWARE AND UPDATES. Upon the execution of this License,
Licensor shall deliver to Licensee (i) the documented human-readable source code
(including all logic architectures, flow charts, algorithms, programmer
commentary and related documentation), and (ii) object code executable load
modules for the computer programs specified in Exhibit A attached hereto along
with the additional documentation also specified in Exhibit A attached hereto
(collectively, together with the Technology and Intellectual Property related
thereto, the "Software"). From time to time during the term of this License,
concurrently with Licensor's release of the same to other licensees of the
Software, Licensor shall deliver to Licensee at no additional charge (i) the
documented human-readable source code (including all logic architectures, flow
charts, algorithms, programmer commentary and related documentation), and (ii)
object code executable load modules for all enhanced, corrected, modified or
updated versions of the Software and related documentation. All such enhanced,
corrected, modified and/or updated versions of the Software and related
documentation shall be considered to be part of the "Software" for all purposes
of this Agreement.
4. ROYALTIES AND AUDITS
4.1 ROYALTIES. In consideration of the licenses granted herein, Licensee
shall pay Licensor royalties in the amount of ten percent (10%) of all Net
Receipts.
4.2 ROYALTY ACCRUAL. Royalties to Licensor hereunder shall accrue at the
time of initial shipment or other transfer of a copy of or grant of right of
access to the Software from Licensee to any End User for which Licensee is
entitled to receive any payment.
4.3 DATE AND CURRENCY OF PAYMENT. Licensee shall pay to Licensor within
forty-five (45) days of the end of each calendar quarter the royalties due to
Licensor on account of Licensee's Net Receipts from the Software during such
quarter, such payment to begin the calendar quarter after the first receipt of
payment from an End User for Licensee's sale of a copy of or grant of a right of
access to the Software. Concurrently with submission of royalty payments,
Licensee shall furnish to Licensor a statement showing the basis for Licensee's
calculation of Net Receipts. All royalties shall be remitted in United States
Dollars. If Licensee receives or expects to receive payment for a copy of or
grant of right of access to the Software in a currency other than United States
Dollars, then for the purposes of calculation of royalties hereunder, the
payment received by Licensee shall be converted into United States Dollars using
the exchange rate quoted in the Wall Street Journal on the last business day of
the calendar quarter in which the royalties accrued.
4.4 AUDITING. Licensor shall have the right, exercisable no more than once
in any calendar year, to have independent certified public accountants inspect
and audit the records of Licensee pertaining to the reproduction, distribution,
sub-licensing and sales of the Software. Such audit shall be conducted upon
reasonable notice during normal business hours and at a time and place mutually
agreed upon by both parties. Such independent certified public accountants shall
be obligated to Licensee to treat all such information as confidential and must
agree not to disclose any of it to anyone except as necessary to report to
Licensor payments that may be owing to
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Licensor. If any such audit reveals an underpayment of greater than ten percent
(10%) in unreported payments owed but not made, Licensor shall be reimbursed by
Licensee for the reasonable expense of such audit. Any underpayment shall be
paid within ten (10) days of Licensee's receipt of written notice of such
underpayment.
4.5 TAXES. Licensee shall be responsible for all taxes, assessments,
permits and fees, however designated, which are levied upon this Agreement,
except taxes based upon Licensor's net income. If any applicable law requires
Licensee to withhold amounts from any payments to Licensor hereunder, (i)
Licensee shall effect such withholding, remit such amounts to the appropriate
taxing authorities and promptly furnish Licensor with tax receipts evidencing
the payments of such amounts, and (ii) Licensee shall apply the reduced rate of
withholding provided by the applicable tax treaty after receiving, if required,
any applicable tax forms or local tax authority approvals necessary to apply any
reduced withholding tax rate. Each party shall cooperate with the other in
minimizing any applicable tax.
5. PROPRIETARY RIGHTS AND CONFIDENTIALITY.
5.1 ACKNOWLEDGEMENT. Licensee acknowledges that:
(i) The Software remains the property of Licensor subject to the
rights and license granted to Licensee hereunder. In the event Licensee modifies
or creates derivative works based upon the Software, such modifications and/or
derivative works shall be the exclusive property of Licensee, subject to the
rights of Licensor in the Software included therein and Licensee may add its own
copyright or other proprietary notices on or in any copies thereof; and
(ii) The Software is provided to Licensee on a confidential basis
and incorporates trade secrets.
5.2 CONFIDENTIALITY. Licensee agrees to maintain the Software in
confidence. Without limiting the generality of the foregoing, Licensee agrees:
(i) Not to disclose or permit any other person or entity access to
the Software, except that such disclosure or access shall be permitted to (a)
employees, consultants or independent contractors requiring access to the
Software in the course of their employment or services, and (b) licensees or
sublicensees of Licensee, provided that prior to such disclosure or access, such
persons are bound by written confidentiality agreements with terms and
conditions no less stringent than those set forth herein;
(ii) To ensure that Licensee's employees, independent contractors,
licensees and sublicensees are advised of the confidential nature of the
Software; and
(iii) To notify Licensor promptly and in writing of the
circumstances surrounding any possession, use or knowledge of the Software by
any person or entity other than those authorized by this Agreement.
5.3 EXCLUSIONS. Nothing in this Section 5 shall restrict Licensee with
respect to information or data identical or similar to that contained in the
Software, but which (i) Licensee rightfully possessed before it received such
information from Licensor, (ii) subsequently becomes publicly available through
no fault of Licensee, (iii) is subsequently furnished rightfully to Licensee by
a third party without restrictions on use or disclosure, (iv) is independently
developed by Licensee without reference to the Software, and/or (v) Licensee is
required by law to disclose.
6. WARRANTIES AND INDEMNIFICATION.
6.1 OWNERSHIP WARRANTY. Licensor warrants that: (i) Licensor is the owner
of the Software; (ii) the Software does not and shall not infringe any
Third-Party Intellectual Property Rights; and (iii) Licensor has all rights
necessary to grant the licenses set forth herein.
6.2 PERFORMANCE WARRANTY. Licensor warrants that the Software will perform
in accordance with all associated documentation and specifications during the
term of this Agreement. Upon notice from Licensee of any nonconformance of the
Software, Licensor shall, at no additional cost to Licensee, use its best
efforts to promptly correct such problem and provide a corrected version of such
Software to Licensee.
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6.3 LICENSOR WARRANTY DISCLAIMER. LICENSOR HEREBY DISCLAIMS ALL
WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, OTHER THAN THOSE SET FORTH
HEREIN, WITH RESPECT TO THE PERFORMANCE OF THE SOFTWARE, INCLUDING BUT NOT
LIMITED TO THE IMPLIED WARRANTIES OF MERCHANT ABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
6.4 INDEMNIFICATION. Licensor agrees to defend, indemnify and hold
Licensee harmless from any and all losses, damages, liabilities, verdicts,
settlements, judgments, costs, and expenses (including reasonable attorneys'
fees) incurred by Licensee or its customers, arising out of any claim that the
use, distribution, licensing, display, copying, offering for sale, or sale of
the Software infringes any Third-Party Intellectual Property Rights (an
"Infringement Claim") provided that Licensee promptly notifies Licensor in
writing of any such Infringement Claim and Licensee tenders to Licensor or
Licensor's insurer(s) the right to defend or settle the Infringement Claim and
provides reasonable assistance to Licensor, at Licensor's expense, in defending
and settling the Infringement Claim. Licensee shall be entitled to separate
counsel at its expense. Licensor shall not be liable for any claim of
infringement based on any use or distribution of the Software in a manner not
permitted under the licenses granted under this Agreement or not in accordance
with the documentation provided by Licensor hereunder.
7. LIMITATION OF LIABILITY. EXCEPT FOR INFRINGEMENT CLAIMS UNDER SECTION 6
HEREOF, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY THIRD
PARRY FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF
OR IN CONNECTION WITH THIS AGREEMENT, INCLUDING THE LOSS OF ACTUAL OR
ANTICIPATED REVENUE, OR FOR ANY CLAIM THAT AROSE MORE THAN TWO YEARS PRIOR TO
THE INSTITUTION OF SUIT THEREON.
8. TERM AND TERMINATION.
8.1 TERM. This Agreement and the rights and licenses granted hereunder
will continue in perpetuity unless terminated under Sections 8.2 or 8.3 hereof.
8.2 TERMINATION BY NOTIFICATION. Licensee may terminate this Agreement at
any time by notifying Licensor in writing. Notwithstanding any termination by
Licensee pursuant to this Section 8.2, Licensee shall have the right to sell and
distribute the Software out of their then existing inventory of tangible media
containing the Software. Any sale of the Software after the termination of this
Agreement pursuant to this Section 8.2 shall be subject to the royalty
provisions as specified in Section 4 hereof.
8.3 TERMINATION BY PURCHASE. This Agreement shall terminate upon Licensee
purchase of all right, title and interest in the Software from Licensor.
9. GENERAL.
9.1 NOTICES. Any notice required or permitted to be given under this
Agreement shall be delivered by hand, by facsimile or mailed by registered or
certified mail, postage prepaid, return receipt requested, to the addresses of
the parties set forth below or to such other address as may be furnished in
writing by one party to the other party. Notices so sent shall be deemed
effective upon actual receipt.
To Licensor: CodeFire Acquisition Corp.
0000 X. Xxxxxxxxx Xxxx
#000 Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx Xxxx
To Licensee: Teknik Digital Arts Inc.
0000 XxxXxxxxx Xxxx.
#000 Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxx
9.2 GOVERNING LAW. This Agreement shall be governed in all respects by the
internal laws of the State of California, excluding its conflict of laws rules.
9.3 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the parties and their respective successors and assigns.
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9.4 NO AGENCY. Neither party has the authority to make any statement,
representation, warranty or other commitment on behalf of the other and this
Agreement does not create any agency, employment, partnership, joint venture or
similar relationship between the parties.
9.5 SEVERABILITY. If any provision of this Agreement is held invalid or
unenforceable for any reason, such provision shall be curtailed and limited only
to the extent necessary to bring it within applicable legal requirements and
this Agreement as so modified shall continue in full force and effect.
9.6 SECTION HEADINGS. The section headings in this Agreement are solely
for convenience and shall not be considered in its interpretation.
9.7 TAXES. Licensor agrees to pay, and hold Licensee harmless from, any
sales, use or other tax (other than any tax based on Licensee's net income) as
may be imposed with respect to this Agreement or the matters or transactions
contemplated herein as well as the collection or withholding thereof, including
penalties and interest.
9.8 EXPORT. Licensee understands that the Software may be regulated by the
United States Department of Commerce, and agrees to abide by all relevant laws
and regulations relating to export controls or otherwise.
9.9 ENTIRE AGREEMENT. This Agreement contains the entire understanding of
the parties with respect to the matters contained herein and supersedes all
proposals or prior agreements, oral or written, and all other communications
between the parties related to the subject matter of this Agreement. There are
no promises, covenants or undertakings other than those expressly set forth in
this Agreement. This Agreement may not be modified except by a writing signed by
authorized representatives of both parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
LICENSOR:
CODEFIRE ACQUISITION CORP.
By: /s/ Xxxxxxxx Xxxx
-----------------------------------------
Name: Xxxxxxxx Xxxx
Title: Secretary
LICENSEE:
TEKNIK DIGITAL ARTS INC.
By: /s/ Xxxx Xxxxx
-----------------------------------------
Name: Xxxx Xxxxx
Title: President
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EXHIBIT A
SOFTWARE
NAME AND DESCRIPTION OF COMPUTER PROGRAMS
AND RELATED DOCUMENTATION
COMPUTER PROGRAMS: "AniDragon" program including all versions.
DOCUMENTATION:
1. The documented human-readable source code (including all logic architectures,
flow charts, algorithms, programmer commentary and related documentation) for
the Computer Programs listed above.
2. All End User documentation, instruction manuals and reference materials for
the Computer Programs listed above, including terms and conditions of Licensor's
End-User License Agreement and information for End Users about obtaining product
support from Licensor.
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