EXHIBIT 10.12
SOURCE CODE LICENSE AGREEMENT DATED JANUARY 19, 2006
BETWEEN AIR PATROL CORPORATION AND CIROND NETWORKS, INC.
SOURCE CODE LICENSE AGREEMENT
This Source Code License Agreement ("Agreement") is entered into as of the 19th
day of January, 2006 (the "Effective Date") by and between Air Patrol
Corporation, a Nevada corporation having a place of business at 000 Xxxxxxxx
Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxx 00000 ("Licensee") and Cirond
Networks, Inc., a Nevada corporation having a place of business at 0000 Xxxxx
Xxxxx Xxxxx, Xxxxxxx, XX, Xxxxxx X0X 0X0 ("Licensor").
WHEREAS, Licensor develops and manufactures certain software programs commonly
know as Air Patrol Enterprise(TM), AirPatrol Mobile(TM), AirPatrol Sentinel(TM),
AirSafe Enterprise(TM), AirSafe Personal(TM) , AirSafe(TM), WiNcTM, and
pocketWiNcTM (the "Software" defined to include both object and source code
versions thereof);
WHEREAS, Licensee wishes to license Software on the terms and conditions of this
Agreement and
WHEREAS, Licensor wishes to grant such license on the terms and conditions of
this Agreement.
NOW THEREFORE, the parties agree as follows:
1. DEFINITIONS
The following capitalized terms shall have the meaning set forth below for
purposes of this Agreement:
"CUSTOMER" means a customer who licenses a Licensee Software Product for end use
and not for redistribution from either Licensee or from a Distributor.
"DISTRIBUTOR" means a company that is authorized by Licensee or another Licensee
Distributor to market, supply, license and/or distribute the Licensee Software
Products pursuant to a written distribution agreement.
"DOCUMENTATION" means the end user manuals and other documentation which
accompany the generally available Object Code as distributed by Licensor.
"INTELLECTUAL PROPERTY RIGHTS", with respect to the Software, means all rights
in all U.S. and foreign letters patent and applications for letters patent,
patents issued from pending applications and patents claiming priority to such
patents and applications, rights in copyrights and rights of authorship whether
registered or unregistered, rights in trade secrets under common law, state law,
federal law, and the laws of foreign countries and all other intellectual
property rights therein.
"LICENSEE SOFTWARE PRODUCT(S)" means software which is or may be distributed by
Licensee directly or indirectly through a Distributor that was generated by a
compiler or an assembler and which includes all or any portion of the Object
Code. A Licensee Software Product does not include Source Code.
"OBJECT CODE" means a version of the Software that was generated by a compiler
or an assembler and which can be directly executed by a computer system's
central processing unit.
"SOFTWARE" means the software programs defined above, and all of Licensor's
Intellectual Property Rights therein. Software includes Object Code and Source
Code.
"SOURCE CODE" means a version of the Software in human readable form prior to
compilation.
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2. DELIVERY OF THE SOFTWARE AND DOCUMENTATION
2.1 Within five (5) days of the execution of this Agreement, Licensor shall
provide Licensee a disk containing at least one copy each of Source Code, Object
Code, and Documentation.
3. GRANT OF LICENSES
3.1 Based upon the consideration set forth in Section 5 of this Agreement,
Licensor hereby grants to Licensee the following worldwide licenses:
(a) to use the Software and Documentation, in whole or in part, for its
own internal use;
(b) to use the Software and Documentation, in whole or in part, for
developing, manufacturing, reproducing, and supporting Licensee Software
Products;
(c) to use the Software and Documentation, in whole or in part, for
marketing, distributing, sublicensing, and demonstrating Licensee Software
Products to Customers and Distributors;
(d) to merge or combine the Software, in whole or in part, with other
software to create Licensee Software Products, provided always that the
Intellectual Property Rights in the Software or any portions thereof included in
Licensee Software Products, remains vested in Licensor;
(e) to modify, enhance and create derivative works of the Software in
connection with the licenses granted in clauses (a) through (d) above,
including, without limitation, the addition of new features and functionality
thereto.
3.2 Ownership of the Software and Documentation shall remain vested in
Licensor or its licensors. All enhancements, modifications and derivative works
of the Software and Documentation developed by or on behalf of Licensee shall be
owned by Licensee, subject to Licensor's underlying Intellectual Property Rights
in the Software and Documentation. Licensee shall also retain ownership of all
Licensee software programs that may be merged or combined with the Software.
3.3 Licensor grants Licensee and its Distributors the right and license to use
in conjunction with the marketing of the Software under this Agreement any
trademarks or tradenames of Licensor. Such trademarks include but are not
limited to Air Patrol Enterprise(TM), AirPatrol Mobile(TM), AirPatrol
Sentinel(TM), AirSafe Enterprise(TM), AirSafe Personal(TM), AirSafe(TM) , WiNc
ManagerTM, WiNcTM, and pocketWiNcTM. If Licensee utilizes a Licensor trademark
or a Licensor tradename, the trademark or tradename shall be attributed to
Licensor.
3.4 ALL RIGHTS TO THE SOFTWARE AND DOCUMENTATION NOT EXPRESSLY GRANTED HEREIN
ARE RESERVED BY LICENSOR.
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4. LICENSOR'S RESPONSIBILITIES
4.1 Licensor shall provide telephone technical support relating to
installation and system administration of Software to Licensee during Licensor's
regular business hours for one year after the Effective Date. Such support shall
be without charge to Licensee.
4.2 Licensor shall not grant a license to any third party that provides any of
the rights granted in Section 3.1 (a) through (e) and/or Section 3.3 before the
second anniversary of the Effective Date.
4.3 Licensee shall not grant a license to any third party that provides any of
the rights granted in Section 3.1 (a) through (e) and/or Section 3.3 after the
Effective Date so long as Licensor has received at least two hundred-fifty
thousand dollars ($250,000) from Licensee before the first anniversary of the
Effective Date.
5. CONSIDERATION
5 For the rights and licenses granted to Licensee hereunder for versions of
the Licensee Software Products that utilize the Windows 2000, Windows XP,
or Windows Mobile 4.0 operating systems Licensee shall pay Licensor:
(a) twenty percent (20%) of the gross sales of Licensee Software Products
licensed on or before the first anniversary of the Effective Date;
(b) fifteen percent (15%) of the gross sales of Licensee Software Products
licensed after the first anniversary of the Effective Date and on or
before the second anniversary of the Effective Date;
(c) ten percent (10%) of the gross sales of Licensee Software Products
licensed after the second anniversary of the Effective Date and on or
before the third anniversary of the Effective Date;
(d) eight percent (8%) of the gross sales of Licensee Software Products
licensed after the third anniversary of the Effective Date and on or
before the fourth anniversary of the Effective Date; and
(e) five percent (5%) of the gross sales of Licensee Software Products
licensed after the fourth anniversary of the Effective Date.
5.2 For the rights and licenses granted to Licensee hereunder for
derivative versions of the Licensee Software Products that utilize the
Linux, Windows Mobile 5.0 or any operating system other than the
Windows 2000, Windows XP, or Windows Mobile 4.0 operating systems,
Licensee shall pay Licensor (5%) of the gross sales of Licensee
Software Products
5.3 Licensee shall pay Licensor $50,000 upon the execution of this
agreement as payment in advance for the consideration due under the
above sections 5.1 and 5.2 of this agreement.
Upon receiving a written request from Licensor, Licensee shall provide Licensor,
within thirty (30) days of receipt of said written request, with documentation
sufficient to verify compliance with this Section 5.1 for the current and
preceding calendar years.
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6. REPRESENTATIONS AND WARRANTIES
6.1 Licensor represents and warrants that it has the right to grant the
licenses and rights granted in this Agreement and that it is under no obligation
or restriction, nor will it assume any obligation or restriction, which would in
any way interfere with, be inconsistent with or present a conflict of interest
concerning its obligations under this Agreement.
6.2 Licensor further represents and warrants that:
(a) that the Software shall perform substantially correctly. Should the
Software not operate correctly then Licensor shall use reasonable efforts
consistent with industry standards to ensure that it does so in as short a time
as is possible using commercially reasonable efforts; and
(b) it does not represent or warrant herein that the Software is free
of errors.
6.3 EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT, THE SOFTWARE IS PROVIDED
ON AN "AS IS" BASIS. EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT, LICENSOR
EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES TO THE FULL EXTENT
PERMITTED BY LAW, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
6.4 Licensee acknowledges and agrees that the Source Code constitutes
proprietary and confidential information of Licensor.
7. INDEMNITY
7.1 Licensor shall fully indemnify Licensee against any and all loss, costs,
expenses and liability in connection with, and defend Licensee against any
claims (i) that the Software infringes any copyright, patents, trademarks, trade
secrets or other intellectual property rights of third parties; or (ii) which
are based on a failure of Licensor to perform its obligations as set forth in
this Agreement; or (iii) arising out of a breach of the representations and
warranties set forth in Section 6 hereof; provided that:
(a) Licensor is given written notice within ten (10) days from the time
that Licensee first learns of such claim and Licensee gives Licensor reasonable
assistance in connection with the defense of the claim (at Licensor's expense);
provided, however, that Licensee's failure to provide notice within such 10 day
period shall not release Licensor from its indemnification obligations hereunder
unless Licensor can demonstrate that its defense of such claim was materially
and adversely effected by such failure;
(b) Licensor shall have the opportunity to conduct and control of the
claim's settlement or compromise; provided that under any settlement or
compromise Licensee is granted an unconditional general release without
prejudice and such settlement or compromise does not adversely affect any of
Licensee's rights under this Agreement; and
(c) such infringement is not caused by the combination by Licensee of
the Software with other software products.
7.2 In connection with any claim for which indemnification has been sought by
Licensee pursuant to the above Section 7.1, (i) Licensee may assume
responsibility for the direction of its own defense at any time upon prior
written notice to Licensor, including the right to settle or compromise any
claim against it
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without Licensor's consent, provided that in doing so it shall be deemed to have
waived its right to indemnification except in cases where Licensee has declined
to provide a defense of such claim as required by Section 7.1 and (ii) Licensee
may engage counsel of its own choosing at its sole expense to monitor any
defense being provided by Licensor pursuant to Section 7.1 and Licensor shall
cooperate and cause its counsel to cooperate with any counsel so engaged by
Licensee.
8. TERM AND TERMINATION
8.1 This Agreement shall commence upon its execution and shall continue until
terminated as follows:
(a) By either party if the other party commits any material breach of
its obligations hereunder and fails within thirty (30) days after receiving
written notice to cure the same. Any such termination shall be without prejudice
to any other rights which may have accrued to it hereunder;
(b) By either party immediately by written notice if the other party
files a petition in bankruptcy, goes into liquidation, admits that it is
insolvent, makes an assignment for the benefit of creditors, or has a petition
in bankruptcy or receivership filed against it and such petition is not
dismissed with within thirty (30) days following filing.
8.2 In the event of a termination due to a breach by Licensor as set forth in
Sections 8.1 (a) and (b), the licenses granted to Licensee in Section 3 shall
remain in effect perpetually.
8.3 All licenses properly granted to Licensee, Customers and Distributors
hereunder shall survive termination or expiration of this Agreement unless the
Agreement is terminated due to Licensee's material breach under Section 8.1(a)
or is terminated pursuant to Section 8.1(b) due to Licensee's financial
condition.
8.4 In addition to this Section 8, the obligations set forth in Sections 5, 6,
7, 9 and 10 shall survive termination of this Agreement and shall bind the
parties and the legal representatives, successors, heirs and assigns.
9. LIMIT OF LIABILITY
9.1 NEITHER PARTY SHALL IN ANY CIRCUMSTANCES BE LIABLE TO THE OTHER PARTY FOR
ANY SPECIAL, CONSEQUENTIAL OR INDIRECT LOSS, DAMAGE OR INJURY, COST OR EXPENSE
HOWSOEVER ARISING AND OF WHATSOEVER NATURE INCLUDING (WITHOUT LIMITATION) LOSS
OF PROFIT, LOSS OF CONTRACTS, LOSS OF OPERATION TIME OR LOSS OF USE OF ANY
EQUIPMENT OR PROCESS.
10. CONFIDENTIALITY OBLIGATIONS RELATED TO SOURCE CODE AND DOCUMENTATION
10.1 Licensee agrees to handle the Source Code with the same degree of care it
takes to safeguard its confidential or secret information of a like nature, but
in no event less than a reasonable degree of care, and will not disclose or make
available, directly or indirectly, Source Code to any third party, except (i)
for disclosure to independent contractors that have entered in non-disclosure
agreements with terms and conditions consistent with Licensee's confidentiality
obligations hereunder, (ii) as expressly permitted hereunder, (iii) unless
Licensee files a petition in bankruptcy, goes into liquidation, admits that it
is insolvent, makes an assignment for the benefit of creditors, or has a
petition in bankruptcy or receivership filed against it and such petition is not
dismissed with within thirty (30) days following filing, or
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(iv) with the prior written consent of Licensor, which shall not be unreasonably
withheld.
11. GENERAL
11.1 All notices, consents and other communications required or permitted under
this Agreement shall be in writing and sent by registered or certified mail,
postage pre-paid, transmitted by facsimile transmission confirmed by mail as set
forth above or sent by overnight courier (if delivery is confirmed by the
courier) to the addresses indicated on the first page of this Agreement, or such
other address as either party may indicate by at least ten (10) days prior
notice to the other party.
11.2 Both parties agree that the personnel of one party shall not for any
purposes be considered employees or agents of the other party and that the
parties shall be deemed independent contractors. Nothing in this Agreement shall
be construed to constitute either party as an agent, partner or legal
representative of the other party. Both parties assume full responsibility for
the actions of its personnel while performing activities pursuant to this
Agreement. Each party shall bear its own expenses in its performance of this
Agreement unless otherwise specifically indicated in this Agreement.
11.3 Neither party may assign this Agreement without the prior written consent
of the other party, such consent not to be unreasonably withheld. This Agreement
shall inure to the benefit of and be binding upon each of the parties and their
respective successors and permitted assigns.
11.4 If any provision of this Agreement is held by a court of competent
jurisdiction to be illegal, invalid, or unenforceable, the validity or
enforceability of the remainder of this Agreement shall not be affected. The
failure by any party to exercise any of its rights under this Agreement or to
require performance of any term or provision in any one instance shall not
prevent subsequent exercise or enforcement of such rights or be deemed a waiver
of any subsequent breach of the same or any other term or provision of this
Agreement. Any waiver of the performance of any of the terms or conditions of
this Agreement shall be effective only if in writing and signed by the party
against which such waiver is to be enforced.
11.5 The parties agree to keep the specific terms and conditions of this
Agreement in confidence. All press releases relating to this Agreement (if any)
shall require the mutual written approval of both parties provided that Licensee
may, without such approval, issue press releases or other communications that
reference the functionality and features of the Software.
11.6 This Agreement shall be governed by and construed in accordance with the
laws of the State of California and in the event of any dispute the parties
hereto submit to the jurisdiction of the State and Federal courts of Campbell,
California.
11.7 This Agreement represents the entire agreement between the parties with
respect to the subject matter contained herein and supersedes any and all
written communications, representations and arrangements whether written or oral
(whether given or made before or after the date hereof). No alteration,
modification, waiver or addition to this Agreement shall be valid unless made in
writing and signed by both parties' duly authorized representatives.
11.8 The remedies provided by this Agreement are not intended to be exclusive.
Each shall be cumulative and shall be in addition to all other remedies
available to either party under law or equity.
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11.9 This Agreement may be executed in counterparts, all of which together
shall be deemed one and the same License.
AIR PATROL CORPORATION CIROND NETWORKS, INC.
By: /s/ XXXXXXX XXXXXX By: /s/ XXXXXXXX XXXXXX
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Name: XXXXXXX XXXXXX Name: XXXXXXXX XXXXXX
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Title: CHAIRMAN Title: PRESIDENT AND CEO
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