July 20, 1999
Xxxxxxx Xxxxx
Executive Vice President
XXXX COMMUNICATIONS, INC.
00000 Xxxxx Xxxxxx, Xxxxx X-X
Xxxxxx, XX 00000
Exclusive License Agreement
Whereas, XXXX COMMUNICATIONS, INC. (hereafter referred to as "Licensor" and
"XXXX"), is a software and hardware development company that has developed a
proprietary software platform for processing credit cards, ACH, and other
financial and medical verification functions,and other medical services.
Whereas, XXXX has assisted in the development of and is the owner of the One
Medical Service (OMS) program and platform and has an exclusive contract with
Bergen Xxxxxxxx to deliver a range of services through the Bergen Xxxxxxxx
distribution network, and ;
Whereas, Enhanced Information Services (hereafter referred to as "Licensee"), a
Nevada Corporation, is a communications and product development company in the
electronic information industry, and;
Whereas, EIS has been supporting the OMS program through its IVR and telephony
capabilities and EIS desires to exclusively license the OMS program and
associated components.;
NOW THEREFORE, EIS and XXXX agree to the following terms and conditions:
A. Term and Certain Conditions
a. This Agreement shall become effective as of this date and shall continue in
effect for seven (7) years from the date of the underlying license
agreement. subject to sections b and c below.
b. Licensee may terminate this Agreement (i) if Licensor files for bankruptcy
protection under Chapter 7 or 11. or (ii) if Licensor is in breach of this
Agreement.. (iii) In the event, the Bergen Xxxxxxxx ("Bergen") Strategic
Marketing Agreement, made reference to herein is terminated by Bergen,
provided Licensee has remitted in full to XXXX the amounts designated in
this L.O.I. sections: "B. 1. a." and "B.1.b." and "D. 2.".Licensor agrees
to give Licensee thirty (30) days notice in which to cure any default
hereunder. Any notice period given under this Subsection (b) shall be
without
prejudice for any claim for damages or any other right of Licensor under
this Agreement at the time of such termination.
c. Licensor may terminate this Agreement (i) if Licensee files for bankruptcy
protection under Chapter 7 or 11.; or (ii) if Licensee is in breach of this
Agreement. . Licensee agrees to give Licensor thirty (30) days notice in
which to cure any default hereunder. Any notice period given under this
Subsection (b) shall be without prejudice for any claim for damages or any
other right of Licensee under this Agreement at the time of such
termination.
d. Upon termination of this Agreement for reasons found in section A(b) (i,
ii, iii, iv) of this agreement, any Customer receiving Service shall remain
a Customer of Licensee. Further, Licensor agrees not to solicit any
Customers of Licensee for a period of twelve (12) months from the date of
any termination under Section 2b. Likewise, upon termination of this
Agreement for reasons found in section A(c), EIS will turn over to XXXX any
and all business that EIS developed through and with the OMS contract as it
related to the implementation of programs through Bergen Xxxxxxxx. Both
parties agree that in the event the Bergen Agreement is extended, replaced
by any other agreement, renewed, supplemented and/or additional Licensee
products or services are offered or derived from the Bergen Agreement, then
they are automatically included within this letter of intent.
e. Licensor agrees to place 81% of its member interest in One Medical Service,
LLC into an escrow account so that in the event that Licensor files
bankruptcy (as stated above), Licensee still retains its rights to OMS.
B. Fees and Royalties
1. In return for the exclusive license to market OMS (licensing rights to be
defined further in the license agreement), EIS will pay a fee to XXXX of
$567,000 as follows:
a. $60,000 cash upon execution of this agreement (Tuesday, July 20, 1999)
b. $140,000 cash due on or before Friday, July 23, 1999
c. $367,000 note payable as follows:
i. $100,000 due August 1, 1999
ii. $100,000 due September 1, 1999
iii. $158,650 due September 15, 1999 (net of discount of $8,360)
d. As previously agreed upon between the parties, EIS will execute a long-term
unsecured interest-bearing note payable (84 months) in favor of XXXX for
$810,000 @ 8% per annum. Payment of the note payable as follows:
(1) Principal balance of the note payable to be reduced (over time)
by the royalty payment to XXXX and phone card time provided to
XXXX as discussed in section B. 3. and E.2., respectively.
(2) At the end of the 36th month, if no events have triggered payment
of this note payable in full-see (4) below-25% of the remaining
principal balance plus interest shall become due and payable.
(3) At the end of the 84th month, if no events have triggered payment
of the note balance plus accrued interest shall become due and
payable.
(4) The following provisions shall override the regular payment
schedule above and provide for immediate payment of the remaining
principal balance and accrued interest to XXXX:
(a) Licensee's default with any provisions of the agreement;
which may be cured within a 30-day period.
(b) IPO of EIS; in which case Licensee has the option to make
payment in full of Note to Licensor in cash or stock.
2. EIS will assume accounts payable and ownership of current inventory of OMS
platforms and processors which is estimated at 600 units valued at
$200,000 in total inventory based on the following conditions:
x. XXXX will provide EIS with a detailed list of inventory items, location and
value.
b. EIS will have the right to determine through discussions with programmers
and vendors, functionality and usefulness of the hardware and/or software
not only for current use but also for future applications that were
included in the OMS business plan.
c. EIS will also have the right to assume this inventory liability structured
over a timeframe to be mutually agreed upon by and between XXXX, EIS and
the vendor(s).
x. XXXX will cooperate with EIS in getting IVI to agree to acceptable terms on
the accounts payable.
3. EIS will pay XXXX an $8.00 per member platform royalty on each OMS
platform deployed in the OMS network subject to an overriding $1,000
monthly minimum and $6,000 monthly maximum .
4. EIS agrees to take full responsibility (financial and/or otherwise) for
all on-going day-to-day commitments of OMS.
5. Any employees of XXXX that have "overlapping" roles (i.e. between XXXX and
OMS) will be billed weekly to EIS by XXXX at cost (employees to be defined
in the actual agreement).
6. This represents all fees, royalties and other payments to XXXX by EIS or OMS.
C. Usage Rights and Associated Benefits
1. Licensor agrees to give Licensee the sole and full rights to the use,
representation, sales, distribution and deployment of OMS, its program and
all associated services, products, materials, contacts, vendors,
suppliers, and contracts; including the right to use, deploy, present,
publish and modify any and all patents, copyrights, trademarks, service
marks and other intellectual property presently held by One Medical
Services and/or XXXX on behalf of One Medical Services (Schedule to be
included in underlying contract to this Letter of Intent.)
2. Licensee will have the right to service and fulfill all contracts and
agreements held by OMS between all and any parties, including those
contracts held by Licensor on behalf of OMS. (Schedule to be included in
underlying contract to this Letter of Intent.)
3. By issuing this license to EIS, XXXX agrees not to sell, represent,
license, distribute, assign or rent any part, portion or component of the
OMS program to a third party without the expressed written permission of
EIS. (Schedule to be included in underlying contract to this Letter of
Intent.) Licensor retains rights to include OMS as part of its business
plans, projections, etc.
4. XXXX agrees to place its software for the processors and any software
developed to support the OMS program presently or in the future in an
escrow account.
5. XXXX will provide EIS with documentation and a non-exclusive source code
maintenance, modification and distribution license for software and
hardware contained in the operation and maintenance of the Debit Link
system and all the software that had been planned to be used by OMS.
6. Licensor will provide Licensee with software support including software
upgrades, manuals, tools, development, fixes, technical support during
business hours, replacement of faulty equipment and/or software that
XXXX/OMS may develop.
D. EIS Option to Acquire OMS
1. EIS shall have the option to convert the funds that it has paid to XXXX
for royalty and licensing fees into 81% ownership in OMS.
2. EIS shall have the option to acquire the remaining 19% of OMS, the value
of which will be based on independent valuations by either or both parties
or $132,000, whichever is greater.
E. Additional Options
1. EIS shall have the option to acquire and/or purchase additional equipment
from XXXX as XXXX agrees to make it available.
2. EIS will provide XXXX with $3,000.00 per month in prepaid phone card
services at EIS' sole cost. plus a 10% markup.
3. XXXX will provide EIS with first bid on providing XXXX with telecom
support and services for its MedCard program, where practical.
F. It is agreed between the parties hereto that they will not disclose either
directly or indirectly to any third person any confidential information
relating to the business, properties or financial conditions which any other
party disclosed in connection with the negotiation of this transaction.
G. As soon as reasonably possible after the formal acceptance of this agreement,
the parties agree to negotiate and prepare the final license agreement to
consummate this transaction.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
XXXX Communications, Inc. Enhanced Information Services
By: ___________________________ By:_________________________________
Xxxxxxx Xxxxx, Xxxxxxx Xxxxxxxx, CEO&President
Executive Vice President
Date ________ Date __________
ACKNOWLEDGED BY:
By: ____________________________________
Xxx Xxxx, Chief Financial Officer
Date __________
September 1, 1999
Amendment #1 to Exclusive License Agreement dated July 20, 1999
Whereas, XXXX COMMUNICATIONS, INC. (hereafter referred to as "Licensor" and
"XXXX"), is a software and hardware development company that has developed a
proprietary software platform for processing credit cards, ACH, and other
financial and medical verification functions,and other medical services.
Whereas, XXXX has assisted in the development of and is the owner of the One
Medical Service ("OMS") program and platform and has an exclusive contract with
Bergen Xxxxxxxx to deliver a range of services through the Bergen Xxxxxxxx
distribution network, and ;
Whereas, Enhanced Information Services (hereafter referred to as "Licensee"), a
Nevada Corporation, is a communications and product development company in the
electronic information industry, and;
Whereas, EIS has been supporting the OMS program through its IVR and telephony
capabilities and EIS desires to exclusively license the OMS program and
associated components.;
NOW THEREFORE, EIS and XXXX agree to the following additional terms:
Paragraph B.1.c. be amended as follows:
The balance of $367,000 owed by EIS (excludes the note payable) to XXXX for the
licensing rights to OMS will now become due in the following manner:
(1) $100,000 cash to be deposited into XXXX' bank account by close of
business, Tuesday, September 7th, 1999
(2) $83,500 cash to be deposited into XXXX' bank account by close of
business, Wednesday, October 20, 1999
(3) $91,750 cash to be deposited into XXXX' bank account by close of
business, Tuesday, November 30, 1999
(4) $91,750 cash to be deposited into XXXX' bank account by close of
business, Wednesday, January 5, 2000
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
XXXX Communications, Inc. Enhanced Information Services
By: ________________________ By:_________________________________
Xxxx X. Xxxxxxx, President Xxxxxxx Xxxxxxxx, CEO& President
Date:______________ Date:____________
ACKNOWLEDGED BY:
By: ____________________________________
Xxx Xxxx, Chief Financial Officer, Date
