LICENSE AND SERVICES AGREEMENT
THIS LICENSE AND SERVICES AGREEMENT (this "Agreement"), dated
as of the 1st day of May, 1997, is by and between BASE TEN SYSTEMS, INC., a New
Jersey corporation, having a principal place of business and chief executive
office at One Electronics Drive, Trenton, New Jersey 08619 ("Base Ten"), and
uPACS, L.L.C., a New Jersey limited liability company (the "LLC").
WHEREAS, uPACS, L.L.C. (the "LLC") has been formed for the
purpose developing, selling, marketing, and distribution of the "uPACS" picture
archiving and communication system ("PACS") ; and
WHEREAS, Base Ten has agreed to transfer to the LLC (i)
exclusive rights to its uPACS PACS technology (the "Technology"), and (ii) a
non-exclusive license to any patents applying the Technology (the "Ancillary
Technology"); and
WHEREAS, in addition to granting to the LLC the exclusive
right to the Technology , Base Ten will, pursuant to the terms and conditions of
this Agreement, complete the development of the Technology and thereafter market
and sell the Technology;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained herein, and intending to be legally
bound hereby, the parties to this Agreement agree as follows:
1. Grant of Rights in the Technology. Base Ten hereby grants
to the LLC, during the Term of this Agreement, the exclusive rights to the
Technology and the LLC hereby grants to Base Ten the exclusive right to use the
Technology for the purposes of fulfilling its obligations under this Agreement
and for no other purpose. Upon the termination of this Agreement, all of the
LLC's rights in and to the Technology shall automatically and completely revert
to Base Ten.
2. Grant of Rights in the Ancillary Technology. Base Ten
hereby grants to the LLC, during the Term of this Agreement, the non-exclusive
rights to the Ancillary Technology and the LLC hereby grants to Base Ten the
non-exclusive right to use the Ancillary Technology for the purposes of
fulfilling its obligations under this Agreement and for no other purpose. Upon
the termination of this Agreement, all of the LLC's rights in and to the
Ancillary Technology shall automatically and completely revert to Base Ten.
3. Term. This Agreement shall become effective as of the date
and year first above written and shall not be terminated except in accordance
with the provisions of Section 9 of this Agreement (the "Term").
4. Development of Technology. Base Ten hereby agrees, during
the Term of this Agreement, to complete the development of the Technology, and
to submit to the LLC quarterly reports in connection with the progress of such
development and the costs (as hereinafter defined) incurred by Base Ten.
5. Market Development and Sales. During the term of this
Agreement, Base Ten shall undertake to sell, market, and distribute systems
using the Technology (the "Systems"). Base Ten shall provide technical, sales,
administrative and management resources in connection with sales of the Systems.
6. Royalty. Base Ten shall pay to the LLC with respect to the
Technology, an annual royalty of 11% of gross receipts for allocated sales in
accordance with the definitions herein. For the purpose of this Section 6:
"Gross Receipts" means the total of all charges invoiced in an
arms length transaction for sales of the Technology in a product ("Product") in
a direct sale to an end user or to a nonaffiliated distributor less all
allowances for any defective or returned Product, normal trade discounts
actually granted, and all VAT, sales taxes, excise taxes, duties or levies paid
or absorbed and royalties or license fees paid to a third party other than the
LLC for third party intellectual property that is an integral part of the
Product.
"Allocated Sales" means a portion of the Gross Receipts. Where
the Product includes hardware and software, the Allocated Sales will be for all
software that utilizes the Technology calculated by using the list price of the
software and hardware to determine a software allocation ratio. In the case of
the bundling of multiple products in a single sale which includes software and
hardware products that do not utilize the Technology, the Allocated Sales will
be that portion of the Gross Receipts calculated by using the list price of each
product to determine a product allocation ratio followed by the calculation of
the software allocation ratio if applicable.
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Example:
List Price Total Product: $7,500
List Price Technology Based Product: $5,000
List Price Non-Technology Based Product $2,500
Product Allocation Ration: .67
Software Portion of Technology Based Product $3000
Hardware Portion of the Technology Based Product $2000
Software Allocation Ratio: .60
Gross Receipts of Total Product: $6,500
Allocated Sales: $6,500 x .67 x .6 = $2,613
Royalty = $2613 x 11% = $ 287
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7. Costs. Base Ten shall render to the LLC an annual statement
of its "Costs" in connection with the development, sales, marketing, and
distribution of the Technology. For the purposes of this Agreement, the term
"Costs" shall include Base Ten's reasonable direct costs, overhead, and SG&A
expenses, all allocated in accordance with Base Ten's normal allocation
procedures. Base Ten shall render monthly statements of its Costs to the LLC
which the LLC shall pay to Base Ten within 20 days of receipt thereof. If the
annual statement shall indicate that the LLC overpaid for the Costs based on the
quarterly statements, Base Ten shall remit to the LLC any such overpayment
within 20 days of the date of the annual statement. If the annual report shall
indicate that the LLC underpaid for the Costs based on the quarterly statements,
the LLC shall remit to Base Ten any such amount due within 20 days of the date
of the annual statement.
8. Exclusivity. In no event shall anything set forth in
this Agreement be deemed to prohibit or prevent Base Ten from developing,
manufacturing, selling, marketing, or distributing any products or technology
other that the Technology or the Systems to any other person or entity.
9. Default and Termination.
(a) A party to this Agreement shall be in default under
this Agreement if any of the following (each, a "Default") shall occur: (i) such
party fails to perform any of its material obligations hereunder and such
failure continues for more than ninety (90) days after receipt of written notice
from the other party; (ii) such party files a petition under any bankruptcy or
insolvency law, or such a petition is filed against such party and is not
dismissed within sixty (60) days thereafter; or (iii) such party becomes
insolvent, is dissolved or ceases to do business as a going concern.
(b) If a Default described in clause (ii) or (iii) of
Section 8(a) above shall occur, this Agreement automatically shall terminate,
and the LLC's rights to the Technology shall automatically and completely revert
to Base Ten and the LLC's rights to the Ancillary Technology shall automatically
and completely terminate. Upon a Default, the LLC shall pay to Base Ten all
Costs which remain unpaid as of the date this Agreement is terminated, whether
or not such Costs have previously been invoiced to the LLC.
10. Force Majeure. Base Ten shall not be liable for delay in
or failure of performance of its obligations hereunder due to an act of God,
regulation of any state or federal regulatory authority or government, war,
riots, civil commotion, strike or other substantial labor disturbance,
destruction of production facilities or materials by fire, earthquake, storm or
like catastrophe, or other equivalent event. The delivery obligations of Base
Ten hereunder shall be extended hereunder to the extent (but only to the extent)
that the performance of such obligations was actually prevented thereby,
provided that should any delay resulting from such extension exceed ninety (90)
days, then the LLC may by written notice to Base Ten cancel any outstanding
purchase order hereunder and/or terminate this Agreement. Upon the happening of
any condition described in this Section 10, Base Ten shall promptly send written
notice of such condition to the LLC and shall use its best efforts to remove the
cause thereof.
11. Miscellaneous.
(a) Notices. All notices required or permitted to be
given hereunder shall be in writing and shall be mailed by registered or
certified mail, return receipt requested, addressed to the party to whom such
notice is required or permitted to be given or to such other person or address
as may be designated by notice given in accordance with this Section 11(a). All
notices shall be deemed to have been given when mailed.
(b) Assignment. This Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the parties
hereto; provided, however, that no party may transfer or assign its rights or
delegate its performance hereunder without the prior written consent of the
other party. This Agreement shall be for the sole benefit of the parties and
their respective successors and assigns, and shall not be construed to provide
any benefits to any third parties.
(c) Entire Agreement. This Agreement and the Exhibits
hereto constitutes the entire agreement and sets forth the entire understanding
of the parties with respect to the subject matter hereof, supersedes all prior
agreements, covenants, arrangements, letters, communications, representations or
warranties, whether oral or written, by any officer, employee or representative
of any party, and may not be modified, amended or terminated except by mutual
consent of the parties by a written agreement specifically referring to this
Agreement and signed by the parties.
(d) Governing Law. This Agreement shall be governed by
and construed in accordance with internal laws of the State of New Jersey
applicable to contracts made and to be performed therein.
(e) Status. It is understood and agreed: (i) that each
of the parties hereto is an independent contractor; (ii) that neither party
hereto is nor shall be considered to be an agent, distributor or representative
of the other party for any purpose whatsoever; (iii) that nothing in this
Agreement shall be construed to create a relationship of employer/employee
between either of the parties and the employees of the other party; and (iv)
that any contrary claim or representation, directly or indirectly made by either
party to such effect, shall be cause for termination of this Agreement and all
purchase orders placed hereunder.
(f) Counterparts This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which taken together will constitute one and the same instrument.
(g) Severability. Should any provision of this Agreement
for any reason be declared invalid or unenforceable, such invalidity or
unenforceability shall not affect the validity or enforceability of any other
provisions of this Agreement, which other provisions shall remain in full force
and effect; and the application of any such invalid or unenforceable provision
to persons or circumstances other than those as to which it is held invalid or
unenforceable shall be valid and be enforced to the fullest extent of the law.
IN WITNESS WHEREOF, the parties hereto have, by their duly
authorized officers, executed this Agreement as of the day and year first above
written.
BASE TEN SYSTEMS, INC.
By: /s/ Myles M. Kranzler
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Myles M. Kranzler, President
uPACS, L.L.C.
By Base Ten
Systems, Inc., a Member
By: /s/ Myles M. Kranzler
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Myles M. Kranzler, President
By: /s/ Jesse Upchurch
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Jesse Upchurch, a Member