1
Exhibit 10.1
SOFTWARE DEVELOPMENT AND LICENSE
AGREEMENT
This Software Development and License Agreement ("LICENSE AGREEMENT") is
entered into as of the 16th day of March, 1998 by and between MOBINETIX
SYSTEMS, INC., having a place of business at 000 Xxxxxxx Xxxxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000-0000 ("LICENSOR"), and FEDERATED SYSTEMS GROUP, INC., with its
principal place of business located at 0000 Xxxxxxxx'x Xxxx Xxxxxxx, Xxxxxxxx,
Xxxxxxx 00000 ("LICENSEE").
A. Licensor is in the business of developing and manufacturing certain
electronic point of sale products comprising hardware and software;
B. Contemporaneously herewith, Licensor has entered into a Systems
Acquisition Agreement with Licensee (the "AGREEMENT"), pursuant to which
Licensor has agreed to manufacture and sell to Licensee such products on the
terms and conditions contained in the Agreement;
C. In conjunction with the sale of such products, Licensor has to modify
the software contained within such products, create and develop additional
software and license all such software to Licensee; and
D. The parties hereto wish to enter into this License Agreement for
purposes of setting forth the terms and conditions that will govern the
provision of programming services and the license to such software by Licensor
to Licensee.
AGREEMENTS:
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
Page 1
2
SECTION 1. - DEFINITIONS
All Exhibits attached hereto constitute a part of this License Agreement
and are incorporated herein by this reference. Certain capitalized terms used
herein have the meanings given to them in this SECTION 1 or, if not defined
herein, have the meanings given to them in the Agreement. When used herein, the
term "INCLUDING" means "INCLUDING WITHOUT LIMITATION."
o "DESIGN SPECIFICATIONS" means a document that describes in technical
detail the features or functions of the New Software, which upon completion
shall be attached hereto as EXHIBIT A.
o "DEVELOPMENT PHASE" means the period during which Licensee shall
develop and create New Software or enhance, modify or convert the Software,
install same on Licensee's Hardware, and accomplish testing and Software
Acceptance, all in accordance with the Scope Document.
o "HARDWARE" means the Units point of sale computers and related
equipment into which the Licensed Software is installed or with which the
Licensed Software is required to interface, all as specified in EXHIBIT A.
o "LICENSED SOFTWARE" means collectively (i) the object code of the
Software in executable form, (ii) the source code of the New Software,
including all comments and the object code to the script interpreter software,
and (iii) as to each of the Software and New Software, all documentation
including, user manuals, flow charts and the like, and all aspects of a
developer's toolkit (including (i) complete documentation, down to the level of
how a script is built from source; (ii) all required documentation, including
special formats, etc.; and (iii) firmware documentation, including special
formats, etc.; and (iii) firmware documentation, including, specifically,
Application Programming Interface Software (API) and limitations, if any)
related to the Software or New Software, as modified, enhanced or customized
for Licensee's benefit, in accordance with the provisions of SECTION 2.
Page 2
3
o "LICENSEE" means Federated Systems Group, Inc., a party to this
Agreement. References to "LICENSEE" herein include any entity that controls, is
controlled by or subject to common control with Federated Systems Group, Inc.
o "LICENSEE UNDER COMMITTEE" means the users, programming and/or
technical consultants and other employees or agents of Licensee, appointed by
Licensee to cooperate with and provide guidance to Licensor and otherwise be
responsible for the execution of Licensee's obligations hereunder.
o "SCOPE DOCUMENT" means a document containing (i) a detailed
description of all services to be provided by Licensor during the Development
Phase, (ii) a time and action schedule (including key milestones such as the
delivery and acceptance of the various versions of the New Software, the dates
on which such milestones are to be met, the installation dates, and the date on
which testing and acceptance are required to be completed), (iii) a description
of the training obligations of Licensor, and (iv) a list of Licensee's
responsibilities during the Development Phase, if any. Upon completion the
Scope Document will be attached hereto as EXHIBIT B.
o "SOFTWARE" means collectively the following (i) PenWare 3100
Firmware, which is the operating system and encryption software built into each
of the Initial Units and stored in ROM; (ii) SRS Software Product, which is the
ModiNetix software product unknown as the "SECURE RECORDS SYSTEM", as modified
or customized pursuant to the Design Specifications agreed to by both parties;
and (iii) SDK Software Product, which is a software developer's toolkit and is
a MobiNetix software product known as "PENWARE SDK" and includes all
documentation relating or describing same, such as user manuals, flow charts
and the like.
o "SOFTWARE ACCEPTANCE" has the meaning specified in SECTION 2.4.
o "SYSTEM(S)" means the configuration of integrated components
comprising the Hardware and Licensed Software as installed in a Licensee
location.
Page 3
4
o "NEW SOFTWARE" means PenWare 3100 Scripts and is the application
software deliverables identified in the Scope Document and required to be
developed and created hereunder.
SECTION 2. DEVELOPMENT OF LICENSED SOFTWARE
The Software (i.e. the portion thereof known as SRS Software Product) shall be
modified, developed or customized and the New Software shall be created and
developed to create the Licensed Software, and the Licensed Software shall be
installed, all in accordance with the provisions, specification, conditions and
warranties set forth herein.
2.1 CREATION OF DESIGN SPECIFICATION. Licensor shall create a detailed
Design Specification for the New Software, in consultation with and subject to
the approval of Licensee's User Committee, provided, that such Design
Specification shall conform substantially to the functionality broadly
described in Exhibit C to the Agreement.
2.2 CREATION AND EXECUTION OF SCOPE DOCUMENT. Licensor shall submit to
Licensee's User Committee for its approval, a draft Scope Document within
thirty (30) days after the date Licensee approves the Design Specification. If
such draft Scope Document is not approved by Licensee, Licensor shall revise
same, provided, however, that the contents of the Scope Document shall be
acceptable to both Licensor and Licensee. Licensor and Licensee shall make
diligent efforts to ensure that the Scope Document is approved by both parties
within thirty (30) days after Licensor submits its first draft to Licensee.
2.3 EXECUTION OF SCOPE DOCUMENT. Licensor and Licensee shall perform all
their respective responsibilities as defined in and in accordance with the time
and action schedule set forth in the Scope Document.
Page 4
5
2.4 INSTALLATION AND ACCEPTANCE. Licensor shall deliver the Licensed
Software to Licensee in accordance with the Scope Document. After each delivery
by Licensor of a final prototype of the applicable version of the Licensed
Software, Licensee shall have forty-five (45) days to conduct testing on
Licensor's System to verify conformity of such prototype with the Design
Specification (the "testing period"). Licensee shall have until the end of the
testing period to provide written notice to Licensor of all non-conformities
with the Design Specification in such prototype, which notice shall describe
with particularity the non-conformities and the steps required to reproduce
such non-conformity. Licensor shall use reasonable efforts to correct all such
non-conformities and shall deliver to Licensee such corrected prototypes as
necessary to correct all such identified non-conformities. After each delivery
of a corrected prototype, Licensee shall have another forty-five (45) days to
test such prototype and provide notice to Licensor (each a "correction testing
period"). A prototype shall be deemed to be accepted if all the Licensed
Software, updated to reflect the exact code in the System, has been delivered
to Licensee and (i) if Licensee fails to provide notice of any non-conformities
in accordance with this Section 2.4 before the end of the applicable testing
period or correction testing period or (ii) Licensee expressly accepts such
prototype (either, a "Software Acceptance").
2.5 DOCUMENTATION AND TRAINING. Licensor shall provide training and
orientation to Licensee's personnel with respect to the System as specified in
the Agreement. Licensor shall also provide user manuals, flow charts,
developer's toolkit and other document related to the Licensed Software for the
benefit of users at each Licensee location.
Page 5
6
SECTION 3. LICENSE
3.1 GRANT OF LICENSE. Subject to the terms and conditions hereof,
Licensor hereby grants to Licensee, a perpetual, irrevocable and non-exclusive
license to Licensed Software for use by Licensee as set froth below.
3.2 PERMITTED USE. The Licensed Software (excepting the SDK Software
Product) may be used by Licensee in conjunction with its use of the Units in
its department store operations, wherever such operations may be located from
time to time, including Licensee's disaster recovery centers. The SDK Software
Product includes in the Software may be used by Licensee or permitted assignee
wherever Licensee's programming services in respect of the Licensed Software
are performed by Licensee. In addition, Licensee may use the New Software to
prepare derivative works of the Licensed Software, and may otherwise modify,
enhance, reverse engineer, decompile or otherwise handle it, whether by itself
or with the assistance of third parties. Except as may be expressly permitted
herein, Licensee may not (i) distribute or sublicense any portion of the
Software, (ii) prepare derivative works of the Software, or (iii) decompile,
reverse engineer or modify the Software.
3.3 LIMITATIONS. Nothing contained herein shall be construed as
conferring upon Licensee, by implication, estoppel, or otherwise, any license
or other right, except the license and rights expressly granted hereunder. All
rights not expressly granted herein are reserved by Licensor. The licenses
granted hereunder are granted solely to Licensee, as defined herein, and for the
use authorized hereunder.
3.4 PRESERVATION OF CONFIDENTIALITY. The Licensed Software constitutes
the confidential information of Licensor and the provisions of SECTION 7 of the
Agreement shall binding on Licensee with respect thereto. Licensee shall
protect the confidentiality, and take such actions to prevent the unauthorized
disclosure, of the Licensed Software in the same manner as it protects its own
confidential information of a similar nature. Licensee acknowledges that its
breach of this
Page 6
7
SECTION 3.4 would cause irreparable harm to Licensor and in addition to any
other remedies to which Licensor may be legally entitled, Licensor shall have
the right to seek injunctive relief in the event of a breach of this SECTION
3.4 by the Licensee.
SECTION 4. FEES
Licensee shall pay a one-time license fee for the Licensed Software, which
is included in the price payable for each Unit purchased pursuant to the
Agreement.
SECTION 5. WARRANTIES
5.1 LICENSOR'S COVENANTS, WARRANTIES AND REPRESENTATIONS. In addition to
the covenants, warranties and representations of Licensor (as MobiNetix)
contained in SECTION 5 of the Agreement, which are expressly incorporated
herein by this reference, Licensor covenants, warrants and represents that:
(i) the Licensed Software will be substantially free from programming
errors and defects in material and workmanship and, upon
installation, will perform in accordance with the specifications
therefor as contained in the Design Specifications, except for
errors caused or resulting from Licensee's misuse of the
Licensed Software.
5.2 LICENSEE'S COVENANT, WARRANTY AND REPRESENTATION. Licensee covenants,
warrants and represents that Licensee will not sublicense the Licensed
Software in a manner that violates the provisions of SECTION 3.2 hereof.
5.3 DISCLAIMER. EXCEPT AS PROVIDED HEREIN, THERE ARE NO EXPRESS OR
IMPLIED WARRANTIES, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
Page 7
8
SECTION 6. TERM AND TERMINATION
6.1 LICENSE TERM. The license granted herein of the Licensed Software is
irrevocable and cannot be terminated after Licensee has paid the applicable
license fee (which shall be considered paid as to each Unit upon payment by
Licensee of the purchase price payable for such Unit under the Agreement),
provided, however, that upon a breach by Licensee of the provisions of SECTION
3.2 above, Licensor may seek an injunction or a restraining order from a court
of competent jurisdiction, or exercise any other legal or equitable remedy
available to Licensor pursuant to SECTION 3.4.
SECTION 7. MISCELLANEOUS
7.1 INCORPORATION OF AGREEMENT. The provisions of SECTIONS 3.1, 3.2, 5, 6,
7, 8, 9, 10.3, 10.4 and 11 are incorporated herein by this reference and shall
be binding on the parties hereto as if fully stated herein, with "FSG" being
the Licensee hereunder and "MOBINETIX" being the Licensor hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
LICENSOR: LICENSEE:
MOBINETIX SYSTEMS, INC. FEDERATED SYSTEMS GROUP, INC.
By: /s/ XXXXX X. XXXXXXX, XX. By: /s/ XXXX XXXXXX
--------------------------------- ---------------------------------
Name: Xxxxx X. Xxxxxxx, Xx. Name: Xxxx Xxxxxx
Title: CFO Title: VP & CFO
EXHIBIT A
Page 8
9
DESIGN SPECIFICATION
[To be prepared at a later date.]
Page 9
10
EXHIBIT B
SCOPE DOCUMENT
[OUTLINE]
This document to contain:
o Detailed list of Licensor's obligations;
o Detailed list of Licensee's obligations;
o T&A;
o Licensor's training obligations;
o Test specifications (if any);
Page 10
