EXHIBIT 10.8
146
SOFTWARE PURCHASE AGREEMENT
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This Software Purchase Agreement (the "Agreement") dated as of Aug.
15, 1996 by and between Xxxxxxx X. Xxxxxxx (the "Seller") and Information
Analysis Incorporated, a Virginia corporation ("IAI").
WITNESSETH
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WHEREAS, the Seller is the owner of a software program known as CAST
(the "Software") which is utilized in connection with IAI's transition
engineering services;
WHEREAS, the Seller wishes to sell to IAI all of his right, title, and
interest in the Software to IAI;
WHEREAS, IAI is prepared to purchase the Software on the terms and
conditions described herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
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1.1 "Object Code" shall mean the machine-readable instructions in
any form or media for the Software.
1.2 "Software" shall mean all of the Object Code, Source Code,
documentation, and all other elements or components of the CAST software in any
form or media.
1.3 "Source Code" shall mean the human-readable instructions in any
form or media for the Software.
SECTION 2. PURCHASE AND SALE OF THE SOFTWARE
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2.1 Closing. At a closing to take place at IAI, or at such other place
as the parties shall agree to in writing (the "Closing"), the date of this
Agreement being referred to herein as the "Closing Date"), the parties shall
carry out the transactions described herein.
2.2 Transfer of the Software. At the Closing the Seller shall transfer
and deliver to IAI all Source Code, Object Code, documentation and other
information pertaining to the Software, in any form or media, and all copies of
such Source Code, Object Code, and documentation in the possession of the
Seller, in any form or media, to IAI, in return for the consideration described
below.
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SECTION 3. PAYMENT
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3.1 Payment Due at Closing. At the Closing, or as required thereafter,
IAI shall pay to the Seller. or on the Seller's behalf as IAI may elect, the sum
of up to $100,000 in connection with certain tax liabilities of the Seller
existing as of the Closing.
3.2 Royalty Payable to Seller. Commencing as of the Closing, the Seller
shall be entitled to a royalty equal to 10% of the license fees collected by IAI
from the licensing of the Software to third parties. Royalties shall be
payable to the Seller based on actual collections received by CAST and shall
be payable on a quarterly basis. The aggregate amount of royalties payable by
IAI to the Seller pursuant to this Agreement shall not exceed $1,000,000.
SECTION 4. Issuance of Stock Options.
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4.1 Issuance of Incentive Stock Options. At Closing, or within a
reasonable time thereafter, IAI shall issue incentive stock options to
the Seller in consideration of Seller's remaining an employee of IAI after
the sale of the Software. Such incentive stock options shall be exercisable
for IAI's common stock, $.01 par value, as follows:
Number of Date Exercise
Option Shares Exercisable Price
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25,000 January 1, 1997 $4
25,000 January 1, 1998 $4
25,000 January 1, 1999 $4
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
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The Seller hereby represents and warrants to IAI as follows:
5.1 Authority. All necessary action, personal, corporate or
otherwise, has been taken by the Seller to authorize the sale of the Software,
and all of Seller's rights thereto, to IAI.
5.2 Absence of Liens. The Seller is the exclusive owner of the
Software transferred hereby and said Software is not the subject of any liens,
encumbrances, claims, or rights of third parties of any kind.
5.3 Absence of Retained Intellectual Property Rights. By agreeing to
the sale of the Software as described in this Agreement the Seller transfers and
assigns all of his intellectual property rights of any kind or nature in and to
the Software to IAI and agrees not
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to contest IAI's rights therein, or IAI's right to sell, license, or otherwise
exploit the Software in any manner.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF IAI.
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6.1 Authority. IAI has the power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby and the
transactions contemplated hereby have been duly authorized by IAI.
SECTION 7. INDEMNIFICATION.
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7.1 Indemnification by the Seller. The Seller agrees to defend,
indemnify and hold the IAI harmless from and against any damages, liabilities,
losses and expenses (including reasonable counsel fees) of any kind or
nature whatsoever which may be sustained or suffered by IAI based upon a
breach of any representation, warranty or agreement made by the Seller
in this Agreement.
SECTION 8. MISCELLANEOUS
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8.1 Law Governing; General. This Agreement shall be construed under and
governed by the laws of the Commonwealth of Virginia. This Agreement may be
executed in counter-parts, each of which shall be deemed an original.
8.2 Entire Agreement. This Agreement represents the complete
agreement between the parties and supersedes all promises,
representations, understandings, warranties and agreements with reference to
the subject matter hereof, including all inducements to the making of this
Agreement relied upon by all the parties hereto.
8.3 Assignability. This Agreement shall be binding upon, and
shall be enforceable by and inure to the benefit of, the parties named herein
and their respective heirs, successors, administrators and assigns; provided,
however, that this Agreement may not be assigned by either party without
the prior written consent of the other party and any attempted assignment
without such consent shall be void and of no effect.
IN WITNESS WHEREOF the parties hereto have executed this Agreement
under seal as of the date first set forth above.
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/s/ /s/ Xxxxxxx X. Xxxxxxx
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Witness Xxxxxxx X. Xxxxxxx
Information Analysis Incorporated
/s/ By: /s/ Xxxxxx Xxxxxxxxx
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Witness (Title) President
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