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Exhibit 10.15
LICENSE AGREEMENT
This Agreement (:'Agreement") is made this 26th day of April, 1996, by and
between XxXxxxxxx Information Systems Limited (hereinafter"MDIS"), a United
Kingdom corporation, whose business address is Xxxxxxxx Xxx, Xxxxx Xxxxxxxxx,
Xxxxx, XX0 0XX, Xxxxxxx and General Automation, Inc. (hereinafter "GAI"), a
Delaware corporation, whose principal place of business is 00000 Xxxxxxxx Xxxxx,
Xxxxxx, Xxxxxxxxxx 00000, with reference to the following facts:
A. MDIS is owner of all right, title, interest and copyright in a proprietary
operating system known and marketed as REALITY and a version of REALITY
utilized to operate in various operating environments, including UNIX and
AIX, known and marketed as REALITYX (collectively hereinafter referred to as
"Software"). The Software embodies unique concepts, programming techniques,
procedures, designs, structures and routines, all of which constitute
copyrights subject matter and "Confidential Information", which are and
shall remain a valuable property of MDIS, except as provided for herein.
B. GAI is experienced in the development of computer Software, the design and
manufacture of computer hardware, the design, integration, marketing and
distribution of computer systems, and the providing of support and service
for such systems and Software to Value Added Resellers/dealers and
end-users. Further GAI has the capabilities to integrate, market and
support, and otherwise exploit the Software as part of its product line, for
sale to its customers worldwide.
C. GAI desires to be appointed as a Master Distributor and granted a license to
modify, enhance market, sell and otherwise use the Software as provided for
herein. GAI shall have the first right of refusal to be appointed as master
distributor in respect of the REALITYX software for which MDIS seeks to
appoint a master distributor in the United States.
D. On the terms and conditions set forth herein, GAI desires to be appointed as
a Master Distributor for the Software and receive a license and MDIS desires
to appoint GAI as a Master Distributor and to license the Software to GAI as
follows:
1. Term. The term of this Agreement, including the grant of license, shall
commence on the date of execution hereof and continue in perpetuity
unless terminated by either party as hereinafter provided.
2. License. MDIS hereby grants to GAI a non-exclusive license, throughout
the world excluding Australia, New Zealand and the United Kingdom (the
"Territory") subject to the terms and conditions of this Agreement (I)
to have and use the Software in source code form to generate
modifications, enhancements, revisions and create derivative works or
additional modules or translations, (ii) to use the Software for GAI's
own internal data processing needs, to provide data processing services,
for demonstration purposes, or for support and maintenance, (iii) to
sub-license the use of the Software through one or more dealers to sub-
license to end-users, (iv) to distribute and sub-license directly to
end-users within the Territory, and (v) to integrate and configure the
Software with various hardware platforms.
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3. Delivery of Technology. Immediately following the execution of this
Agreement, MDIS shall deliver to GAI the Software in both object and
source code form and techniques, user documentation, training manuals
and such other material as are generally available. Further, should GAI
request it, MDIS may deliver to GAI previous versions of the Software in
object and source code form as available.
4. Enhancements. GAI shall retain all right, title and interest to any
enhancements and modifications or new modules or translations made by
GAI to the Software. However, the use of any portion of the Software,
including any portion of the design or external or internal interfaces,
whether they are modified or enhanced, or included in other programmes
or converted to another programming language or operating system, shall
remain subject to all the terms and conditions of this Agreement. No
modification or enhancement, regardless of how material, shall alter
GAI's obligations hereunder.
5. Support Obligation. GAI is solely responsible for providing support to
its value added resellers, dealers, sub-dealers and end-users within the
Territory. GAI specifically acknowledges that MDIS is not obligated to
provide support to GAI's end-users or dealers. GAI further acknowledges
that it is responsible for the supervision, management and control of
the marketing, distribution, sub-licensing and use of the Software to
GAI's end-users and dealers.
6. Upgrade. MDIS agrees to provide GAI with any upgrades or revisions of
the Software which it generally makes available to its distributors in
the future at a fee that is no more than MDIS charges to any of its
other distributors.
7. Rovalty Payments
7.1 Royalty Rate. GAI shall upon execution of the Agreement pay to MDIS
nil royalties. Thereafter upon each anniversary of the date of this
Agreement commencing from 1997, GAI shall pay to MDIS the annual
royalties payment equivalent to the amount specified under each
relevant year in Table 1 Exhibit A. GAI understands and accepts
that the royalty fee has been set by MDIS only on the understanding
that in each year of this Agreement the annual royalty payment
specified in Table 1 Exhibit A shall be paid to MDIS and it shall
constitute an irrevocable commitment on the part of GAI.
7.2 Late Charges. If MDIS does not receive the full amount due on or
before the date upon which such amounts are due and payable, such
outstanding amounts shall thereafter bear interest until payment at
the maximum rate permissible by applicable law, but in no event to
exceed ten percent (10%) per annum.
7.3 Place of Payment. All amounts due to MDIS shall be sent or
delivered by GAI to MDIS at the address first written above or such
other address as MDIS may designate from time to time by written
notice to GAI.
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7.4 Taxes. In addition to all the amounts due to MDIS hereunder, GAI
shall pay to or reimburse MDIS the amount of any sales, use,
excise, property or other federal, state, local or foreign taxes,
duties, tariffs, (other than any tax based solely on MDIS's net
income) and related interest which MDIS is at any time obligated to
pay or collect in connection with or arising out of a transaction
contemplated under this Agreement.
8. GAI Records. GAI shall keep at its principal place of business accurate
books of account relating to the exploitation, marketing, sub-licensing
and use by GAI of the Software. Such books of account shall include the
identity, address and date of delivery or sub-license to an end-user or
dealer and a copy of the original invoice to the end-user dealer.
9. Paid-up Purchase Option. For good and valuable consideration, the
sufficiency of which is hereby acknowledged, MDIS hereby grants to GAI
and GAI hereby accepts an irrevocable option to purchase a paid-up
license of the software. The option may only be exercised after 1st
January 1998 and shall become exercisable upon the payment by GAI to
MDIS in the amount of three million eight hundred and fifty thousand US
dollars ($3,850,000.00) in royalties or a cash payment equal to two
million nine hundred thousand US dollars ($2,900,000.00) less an amount
representing eighty (80) percent of the aggregate of all previously paid
royalty payment. Thereafter GAI shall have the same rights to the
software in perpetuity as provided in this Agreement without further
royalty payments to MDIS.
10. Proprietary Rights
10.1 Title to Software. Notwithstanding the provisions of Section 9
above, full copyright and title to the Software, including
derivative works and related documentation and products delivered
to GAI shall at all times remain with MDIS.
10.2 Definition and Nature of Confidential Information. GAI acknowledges
and agrees that the "Confidential Information" shall at all times
be and remain a sole and exclusive property of MDIS. For purposes
of this Agreement, the term "Confidential Information" shall
include documentation, and all versions of the foregoing delivered
to GAI by MDIS, and all data, specifications, techniques, know-how,
programs, source code, object code, documentation, diagrams, flow
charts and other materials of any type whatsoever (tangible or
intangible) contained or revealed in any of the foregoing. Such
Confidential Information contains valuable confidential information
and trade secrets developed or acquired by MDIS due to expenditure
of a great deal of time and money. Confidential information does
not include: (a) information which already or otherwise becomes
publicly known through no negligence or breach of any duty of
confidentiality of GAI pursuant to this Agreement or (b)
information which is lawfully received by GAI from third parties;
or can be shown by GAI to have been independently developed by GAI.
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10.3 Obligations of GAI Regarding Confidential Information. GAI agrees
to observe confidentiality with regard to Confidential Information
including, but not limited to, not disclosing or otherwise
permitting any third person or entity access to the Confidential
Information, except as necessary to exercise the rights granted
herein, with MDIS's prior written permission, which will not be
unreasonably withheld (except that such disclosure access shall be
permitted to an employee or consultant of GAI on a need to know
basis) and generally taking any and all other actions reasonably
necessary or appropriate to insure the continued proprietary nature
of the Confidential Information.
11. License of Trademark. MDIS grants to GAI a non-exclusive license to use
MDIS's "Reality" trademark in the Territory only in the use, marketing,
distribution and sale of the Software under this Agreement, GAI shall
place a notice with the trademark in every instance of use by GAI, in a
location and of a form acceptable to MDIS, stating the Reality
trademark is owned by MDIS, or such other notice as MDIS requires. GAI's
use of the trademark shall be subject to MDIS' then prevailing trademark
policies and procedures as advised by MDIS to GAI from time to time, and
GAI shall be given a reasonable period of time to comply with such
changed policies and procedures.
12. Representations and Warranties. MDIS makes representations and
warranties:
12.1 MDIS has the unrestricted right, power and authority to enter into
this Agreement and to grant the license and the option provided
herein to GAI and that MDIS possess all right, title, interest and
copyright to the Software free and clear of all liens,
encumbrances, licenses and other rights.
12.2 The Software does not infringe on any U.S. trade secret, patent,
invention or intellectual property right or otherwise violate the
rights of any third party, and no proceedings have been instituted
or are pending and no action has been threatened and no claim has
been made by a third party alleging any such violation.
12.3 That the Software will perform substantially as stated in the
documentation supplied to GAI and that the Software is not free of
bugs.
12.4 SAVE AS EXPRESSLY PROVIDED IN THIS AGREEMENT, ALL WARRANTIES
EXPRESS OR IMPLIED, ORAL OR IN WRITING, BY LAW CUSTOM OR OTHERWISE,
INCLUDING BUT NOT LIMITED TO ANY WARRANTIES, TERMS AND CONDITIONS
OF MERCHANTABLE QUALITY AND FITNESS FOR ANY PARTICULAR PURPOSE ARE
HEREBY EXCLUDED.
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13. Obligation to Defend. MDIS will defend any action or proceedings brought
against GAI or its dealer's or end-users that is based upon a claim or
allegation that the Software, manuals, documentation, or trademarks, in
the form provided by MDIS to GAI hereunder and as used by GAI,
infringe or misappropriate a United States trademark, trade secret,
patent or copyright. MDIS will pay all resulting costs, damages and
legal fees and costs which may be awarded against those parties in such
action or proceeding which are attributable to such claim or
allegations, provided that GAI: (a) promptly notifies MDIS in writing of
any such action or proceeding; (b) GAI makes no admission or statement
without MDIS' prior written consent; (c) provides MDIS with all such
reasonably necessary assistance and co-operation as MDIS may reasonably
request for the defense thereof; and (d) insofar as any such action or
proceeding directly relates to such claim or allegation, allows MDIS to
direct the defence and enter into any settlement, with the written
consent of GAI (such consent not to be unreasonably withheld).
14. No Warranty to Third Parties. MDIS DOES NOT MAKE A WARRANTY TO ANY
END-USER OR THIRD PARTY (INCLUDING, WITHOUT LIMITATION DEALERS) WITH
RESPECT TO THE SOFTWARE, INCLUDING, WITHOUT LIMITATION, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. GAI
SHALL NOT HAVE THE RIGHT NOR CLAIM TO HAVE THE RIGHT TO MAKE OR PASS ON
BEHALF OF MDIS ANY OF THE WARRANTIES OR REPRESENTATIONS SET OUT IN
SECTION 14 TO ANY END-USER OR THIRD PARTY.
15. Limitation of liability.
15.1 MDIS SHALL INDEMNIFY GAI IN RESPECT OF ANY DIRECT LOSS OR DAMAGE TO
THE TANGIBLE PROPERTY OF GAI WHERE SUCH LOSS OR DAMAGE IS CAUSED BY
THE NEGLIGENCE OF MDIS, ITS SERVANTS OR AGENTS UP TO AN AMOUNT NOT
EXCEEDING US $100,000 FOR EACH EVENT OR SERIES OF CONNECTED EVENTS.
15.2 GAI SHALL INDEMNIFY AND HOLD MDIS HARMLESS AGAINST ANY LOSS, DAMAGE
OR EXPENSE (INCLUDING LEGAL COSTS) SUFFERED BY MDIS AND CAUSED BY
OR ARISING OUT OF ANY ACTUAL OR THREATENED THIRD PARTY PROCEEDINGS,
CLAIMS OR ACTIONS HOWSOEVER ARISING FROM ANY ACT OR OMISSION OF GAI
OR ITS SUB-DISTRIBUTORS, DEALERS OR END-USERS, OR FROM THE SUPPLY,
USE OR SUPPORT OF THE PRODUCTS OR SOFTWARE.
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16. Exclusion of Certain Damages
MDIS' ENTIRE LIABILITY IS AS SPECIFIED IN CLAUSES 14, 16.1 AND 16.2
EXISTENCE OF ONE OR MORE CLAIMS, SUIT OR PROCEEDING SHALL NOT EXPAND OR
ENLARGE THE LIMITATION OF LIABILITY. EACH PARTY HEREBY AGREES THAT EACH
SHALL NOT BE LIABLE FOR INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES
BASED UPON THE USE OF THE SOFTWARE OR RELATED PRODUCTS OR DOCUMENTATION
BY GAI OR THE DISTRIBUTION, MARKETING AND LICENSING OF THE SOFTWARE,
EVEN IF ONE PARTY HAS BEEN NOTIFIED OF THE POSSIBILITIES OF SUCH
DAMAGES. THE PARTIES HEREBY ACKNOWLEDGE THAT THE OTHER PORTIONS OF THE
AGREEMENT HAVE BEEN MADE IN RELIANCE UPON INCLUSION OF THIS SECTION.
17. General
17.1 GAI shall ensure that prior to delivery of the Software to a
sub-licensee, such sub-licensee enters into a distribution
agreement with GAI on substantially the same terms and conditions
as are contained in this Agreement or on terms and conditions which
may be notified to GAI by MDIS from time to time.
18. Default and Termination
18.1 Definition and Right to Terminate for Default. For the purposes of
this Agreement, default by any party occurs upon the (I) failure to
cure a material breach where such breach is capable of cure, other
than a breach due to failure to pay monies within thirty (30) days
following written notice from the other party stating such breach;
(ii) breach of any warranty; (iii) the finding that any
representation made herein proves to be materially false; (iv)
failure of a party to pay monies required to be paid hereunder
within (30) days following written notice from the other party
stating that monies are required to be paid to the other party to
this Agreement. Upon the occurrence of such default, the
non-defaulting party may terminate this Agreement by giving sixty
(60) days written notice to the defaulting party.
18.2 Obligations and Duties upon Termination
(a) Upon termination, except in the event of the exercise of the
pre-paid option, GAI's right to use any Confidential Information
shall terminate and GAI shall immediately deliver to MDIS all such
Confidential Information in its possession and control, subject to
the provision below. All obligations of confidentiality shall
survive the termination of this Agreement. However, all rights
granted by GAI to end-users shall continue in full force and
effect. GAI shall continue to be able to support such end-users
after termination for the remainder of the period of any relevant
Support Agreements. The parties shall mutually agree as to what
Confidential Information GAI requires in order to support the
end-users after termination of the Agreement.
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(b) GAI's right on the license granted hereunder shall immediately
cease and GAI shall immediately discontinue all other use of the
Software and MDIS "REALITY" trademark.
19. Assignment. Neither party shall assign or transfer this Agreement
without the prior written consent of the other which shall not be
unreasonably withheld or delayed.
20. Miscellaneous Provisions
20.1 Entire Agreement and Severability. This Agreement constitutes the
entire understanding and agreement between MDIS and GAI and
supersedes any and all prior, contemporaneous oral or written
communication or representations relating to the subject matter
hereof, all of which are merged herein. This Agreement can only me
modified, amended, or altered by an instrument in writing, mutually
signed by the parties hereto. Such amendment shall be binding with
or without any additional consideration. If any provision of this
Agreement is held unenforceable, it shall not be deemed to impair
the validity of the remaining provisions of the Agreement which
shall remain in full force and effect.
20.2 Waiver. No waiver of any provision of this Agreement or any rights
or obligations of either party hereunder shall be effective, except
pursuant to written instrument signed by the party or parties
waiving compliance. This waiver shall be effective only in the
specific instance and the specific purpose stated.
20.3 Relationship of Parties. The relationship between MDIS and GAI is
that of licensor and licensee. Nothing contained herein shall be
deemed or construed as creating a joint venture or partnership
between MDIS and GAI. It is agreed and understood that GAI is an
independent contractor and has no authority or power to bind or
contract in the name of or to create any liability against MDIS in
any way or for any purpose. Further it is not the intention of this
Agreement or the parties hereto to confer a third party beneficiary
right of action upon any person or entity whatsoever.
20.4 Governing Law and Choice of Forum. This Agreement shall be
construed and enforced in accordance with the laws of the State of
California applicable to contracts and wholly executed and wholly
performed therein. The parties agree that, and hereby submit
themselves to the non-exclusive jurisdiction and venue for the
purposes of resolving any action or proceeding brought by either
party against the other arising out of or related to this Agreement
shall be brought only in a state or federal court of competent
jurisdiction located in the County of Orange, California.
20.5 Attorney's Fees. The prevailing party in any action or proceeding
between GAI and MDIS arising out of or related to this Agreement
shall be entitled to recover its reasonable attorney's fees and
costs incurred in connection therewith.
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20.6 Notices. All notices, requests, demands and other communications
required under this Agreement shall be deemed duly given to the
respective parties at the addresses first set forth above or at
such other addresses as designated in writing by either party in
accordance with this Section upon (a) personal delivery, or (b)
delivery by U.S. mail, postage pre-paid, or (c) receipt by the
transmitting party of confirmation or answer back is by telex,
telegram or facsimile.
EXECUTED as of the date first written above.
XxXxxxxxx Information Systems Ltd General Automation, Inc.
By: /s/ XXXX XXXXX By: /s/ X. X. Xxxxx
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Xxxx Xxxxx Xxxxxx X. Xxxxx
Its: President and Chief Executive Its: President and Chief Executive
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EXHIBIT A
GAI will pay MDIS royalty payments of $35 per user for each license sold to its
customer up to the annual minimum payment as scheduled in Table A below.
TABLE 1: ROYALTY PAYMENT COMMITMENT SCHEDULE
Year 1996 1997 1998 1999 2000 2001 2002
NIL $400,000 $650,000 $700,000 $700,000 $700,000 $700,000
Royalty payment will be made on April 26 of each relevant year, i.e. payment for
1997 of $400K will be made on April 26, 1997.
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