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EXHIBIT 10.7
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SOFTWARE LICENSE AGREEMENT
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The following document constitutes a Purchase Agreement between:
SUMMIT V, INC., a subsidiary of Jenkon International, Inc., a corporation
organized and existing under the laws of the State of Washington, United States
of America, located at 4601 NE 77TH AVENUE, SUITE 300, VANCOUVER, WA 98662,
hereinafter referred to as Seller, and
IS 14, Inc. (Maxxis Group, Inc.), a corporation organized and existing under the
State of GEORGIA, United States of America, located at 11205 ALPHARETTA HWY,
SUITE G-3, ROSWELL, GA 30076, hereinafter referred to as BUYER.
1. BASIS OF AGREEMENT/GRANT OF LICENSE
For the consideration and under the terms and conditions of this
Software License Agreement (hereinafter "this Agreement"), Licensor
hereby grants and Licensee hereby accepts a perpetual, nonexclusive,
nontransferable license to use the software described in 2. below
(hereinafter, the "Licensed Software"). Licensor reserves all rights
not expressly granted to Licensee. In undertaking and performing this
Agreement, Licensee shall be entitled to act through, in concert with,
or for the benefit of its Affiliates; in this regard, "Affiliate" shall
mean any corporation, partnership or other entity that is in or under
the direct or indirect control of Licensee or of another Affiliate of
Licensee, or any corporation, partnership or other entity that is under
common control with Licensee or another Affiliate, or any successor to
all or substantially all the business of Licensee or successor to all
or substantially all the business of Licensee or such an Affiliate and
"control" shall exist whenever there is an ownership, profits, voting
or similar interest (including right or option to obtain such an
interest) representing at least 30% of the total interests of the
pertinent entity then outstanding (treating as outstanding any
interests obtainable by Licensee or the relevant Affiliate pursuant to
the exercise of the aforementioned rights or options). This provision
shall not be construed to change any restrictions applicable to the
number of CPUs or the locations where the Software may be executed. All
references to use by Licensee shall be construed to permit and include
use by Affiliates or by suppliers, sales agents, customers, management
companies, joint venture partners and other business entities given
access to or use of the software in furtherance of their business with
Licensee or any Affiliates.
2. LICENSEE FEE, PAYMENT SCHEDULE, EFFECTIVE DATE, DESIGNATED SITE AND
COMPUTER:
2.1 LICENSE FEE
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Licensed Software Check if Users Fee
Included
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SUMMIT V BASE PACKAGE CONSISTING OF: X 8 $40,500.00
DISTRIBUTOR TRACKING AND MAINTENANCE MODULE
SALES ORDER PROCESSING MODULE
INVENTORY CONTROL MODULE
COMMISSIONS MODULE*
CUSTOMER SERVICE MODULE
SYSTEM SECURITY MODULE
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Licensed Software Check if Users Fee
Included
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EXECUTIVE INFORMATION SYSTEM
ACCOUNTS RECEIVABLE
REGIONAL INFORMATION SYSTEM
SALES TAX GST/PST MANAGEMENT MODULE
*Includes 100 hours towards the set-up of the compensation
plan. At this time the plan has not been defined. Should
the set-up require more than ____ hours, then additional
fees will be applied at $100/hour for time in excess of ___
hours.
TOTAL $40,500.00
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2.2 PAYMENT SCHEDULE
Deposit of $20,250.00 due upon execution of this Agreement
Payment of $10,125.00 due February 22, 1997.
Balance of $10,125.00 due upon installation of base software package at Licensee Site.
Any late payment according to the terms set forth in the payment
schedule above shall be subject to a late payment charge of one and one
half percent ( 1 1/2% ) per month, or the maximum allowed by law,
whichever is less, on the past due balance, commencing with the
payment's due date.
2.3 EFFECTIVE DATE
Date: 2/2/97. This is the effective date of this Agreement.
2.4 DESIGNATED INSTALLATION SITE
Licensee address as noted above.
This is the sole physical location at which the Licensee may use the
Licensed Software on Licensee's Computer or computers designated under
Section 2.5 ( the "Designated Computer").
2.5 DESIGNATED COMPUTER
Designated Computer Manufacturer
Computer Model
Serial Number
Buyer may change platforms, operating systems or equipment without
upgrade charge.
2.6 MOVING
Licensee may move the Designated Computer and Licensed Software to a
new site and use the Designated Computer and Licensed Software at the
new site provided Licensee notifies Licensor of the new location, in
writing, at least 48 hours prior to moving the Designated Computer and
Licensed Software.
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3. MANUALS
Licensor will provide one full set of the SUMMIT V Licensed Software
manuals. Additional manuals can be purchased as desired.
4. SOFTWARE LICENSE
4.1 OWNERSHIP OF LICENSED SOFTWARE
Licensor is and shall remain sole owner of the Licensed Software and of
all information related to the Licensed Software, including, but not
limited to source code, object code, algorithms, screen displays, file
designs, report formats, and documentation (all of which are deemed as
"Confidential Information") furnished in connection with this
Agreement, and of all right, title, interest, and goodwill related
thereto.
4.2 TITLE AND OWNERSHIP RIGHTS INDEMNIFICATION
4.2.1 Licensee acknowledges that Licensor is the sole owner of the
Licensed Software and all past, present, and future versions
and releases thereof, including any and all modifications
thereof made by Licensor and all patents, copyrights, and
other proprietary rights relating thereto.
4.2.2 Licensor shall defend Licensee against suits, proceedings at
law and any and all liability or expense arising out of or in
connection with, any claim that the use of the Licensed
Software and any module described in 2. hereof, or any module
licensed at a later date covered as an item of the Licensed
Software, infringes on any existing patent, copyright or other
property right and, subject to the limitation of liability
contained herein. Licensor will pay all costs, charges and
attorney's fees that a court finally awards as a result of
such claim. To qualify for such defense and payment, the
Licensee must:
4.2.2.1 Give Licensor prompt, written notice of any such
claim; and
4.2.2.2 Allow Licensor to control, and fully cooperate with
Licensor in the defense and all related settlement
negotiations.
4.3 TERM AND TERMINATION
The term of Licensee's license under this Agreement shall commence upon
the Effective Date, and shall remain in force perpetually so long as
Licensee is not in default under this Agreement. Should Licensee
terminate or if default results in termination, Licensee's license to
use the licensed software shall terminate, and Licensee shall do the
following:
4.3.1 Delete and destroy or return to Licensor all copies of the
Licensed Software and not retain any copies of the Licensed
Software.
4.3.2 Assist the Licensor in changing the renewal code to reflect
the termination date as soon as termination notice is given by
Licensor or Licensee.
4.3.3 Confirm in writing that it has complied with the terms of this
paragraph within thirty days of termination of the Agreement.
The terms and conditions pertaining to the nondisclosure of the
Licensed Software will remain in effect beyond default and/or
termination of Licensee's license.
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4.4 SOFTWARE WARRANTY
EXCEPT AS IS EXPRESSLY PROVIDED FOR HEREIN, LICENSOR MAKES NO WARRANTY,
EXPRESSED OR IMPLIED RESPECTING THE LICENSED SOFTWARE, INCLUDED, BUT
NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE. A WARRANTY IS AVAILABLE FROM LICENSOR UNDER A
SOFTWARE MAINTENANCE AGREEMENT.
4.5 LIMITATIONS OF LIABILITY
In all situations involving performance or nonperformance of the
Licensed Software furnished hereunder, the entire liability of the
Licensor to the Licensee, or to any third party, and the Licensee's, or
any third party's exclusive remedy shall be as follows:
4.5.1 The correction by Licensor of Licensed software defects, or,
4.5.2 If, after reasonable efforts, Licensor is unable to make the
unmodified Licensed Software operate as documented, Licensee
shall be entitled to recover actual damages to the limits as
set forth in this section. For any other claim concerning
performance or nonperformance of Licensed Software pursuant to
or in any other way related to the subject matter of this
Agreement and any supplement hereto, the Licensee shall be
entitled to recover actual damages to the limits set forth in
this section.
4.5.3 Licensor's liability for damages to the Licensee for any cause
whatsoever, and regardless of the form of action, whether in
contract or in tort, including negligence, shall be limited to
the total amounts paid to Licensor under this Agreement.
4.5.4 In as much as Licensee shall prepare commission checks from
time to time, Licensee shall accept full responsibility to
audit and verify all commission calculation amounts before
sending any commission check to any person. In the event an
error is found, whether before or after any commission check
is sent to any person, Licensor's exclusive liability shall be
to correct the software programs in a timely fashion. If
Licensee sends incorrect commission checks to any person,
Licensor shall not be liable for loss of profits or damages of
any kind resulting from the incorrect calculations of
commission amounts.
4.5.5 No action regardless of form, arising out of a claim of a
breach of this Agreement may be brought by either party more
than one (1) year after the date of the alleged breach, except
that an action for nonpayment will be limited only by the
statute of limitations of the State of Washington
4.6 NON-DISCLOSURE OF LICENSED SOFTWARE AND CONFIDENTIAL INFORMATION
4.6.1 Licensee is prohibited from distributing, transferring
possession of, or otherwise disclosing or making available the
Licensed Software or Confidential Information to any person
(other than Consultants as described herein) and from
reproducing or installing the Licensed Software for use on any
computer other than the Designated Computer. Licensee shall
exercise the highest degree of care in safeguarding the
Licensed Software and Confidential Information against loss,
theft, or other deliberate or inadvertent disclosure and shall
generally take all steps necessary or that are requested by
Licensor to ensure maintenance of confidentiality.
4.6.2 Section Removed
4.6.3 Licensee's obligations under this section shall survive any
termination or breach of this Agreement. VIOLATION OF ANY
PROVISION IN THIS SECTION SHALL BE THE BASIS FOR THE IMMEDIATE
TERMINATION OF THIS AGREEMENT.
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4.6.4 If Licensee engages Consultants to assist in the adaptation
and modification of the Licensed Software, each Consultant
shall sign a confidentiality and nondisclosure agreement in a
form acceptable to Licensor, prior to any such work being
carried out.
4.7 MODIFICATION AND ADAPTATION OF LICENSED SOFTWARE
Licensee may modify the Licensed Software, but only for Licensee's own
use. Any portion of the Licensed Software included or merged into other
software, and Licensed Software modified by Licensor, Licensee or any
other party shall at all times remain subject to all terms of this
License Agreement. Should Licensee modify the Licensed Software,
Licensor shall not be responsible for any failure, damages, or injuries
resulting from the use of such modified Licensed Software. Absent
written agreement to the contrary, any modification or merger of the
Licensed Software by the Licensee directly or indirectly may result in
the voiding of any warranties made herein and may void this agreement,
at the option of Licensor. On Licensor's request, Licensee shall
furnish Licensor with a copy of all such modifications, adaptations,
and translations, including source code. Licensor shall have a
perpetual, royalty-free, and nonexclusive right to use and distribute
any such modification, adaptation, or translation developed by Licensee
or any of Licensee's consultants.
4.8 NONDISCLOSURE
4.8.1 Licensee recognizes and acknowledges that breach of the
confidentiality and nondisclosure provisions of this Agreement
by Licensee, its employees, Consultants, agents,
representatives, or persons authorized to have access to the
Licensed Software will cause Licensor irreparable damage which
cannot be readily remedied in damages in an action at law,
thereby entitling Licensor, in addition to any other remedies
available to it, to have injunctive relief against Licensee.
4.8.2 The Licensee shall take all reasonable steps necessary to
ensure that the Licensed Software or Confidential information
is not made available in any form to any person, persons or
company not licensed by this Agreement. In particular, the
Licensee recognizes the proprietary nature of the Licensed
Software and Confidential Information and agrees to make no
copies, with the exception of normal backup requirements, of
the Licensed Software and Confidential Information or any of
its components by any means or for any purpose whatsoever,
except as expressly stated in this License Agreement, without
prior written approval of the Licensor.
4.9 PROTECTION OF SOURCE CODE
This section applies only if Source Code is provided to Licensee.
4.9.1 Source Code, being Confidential Information, is subject to all
confidentiality and nondisclosure provisions of this
Agreement. Any new source code created or derived from
existing Source Code by Licensee or any Consultant shall be
for Licensee's internal use only and shall remain subject to
all confidentiality and nondisclosure provisions hereof.
4.9.2 Licensee will not allow anyone to attempt to re-create Source
Code from Object Code by reconstruction, reverse compiling or
reverse engineering.
4.9.3 Under this Agreement a Source Code License is not available to
Buyer
4.9.4 This Agreement is contingent upon execution of a Source Code
Agreement between both Buyer and Seller within 90 days.
4.10 COPYRIGHT AND COPYRIGHT NOTICES
Copyright in the Licensed Software is and shall remain in Licensor's
name. Licensee shall include and cause to be included in all
modifications, adaptations, and translations of the
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Licensed Software, Licensor's notice of copyright and of proprietary
interest, in English and translated into foreign language adaptation.
No such notices of copyright or of proprietary interest shall be
deleted or modified. Licensee shall, at Licensor's reasonable request,
promptly execute and sign any and all applications, including but not
limited to copyright applications, and any and all assignments, and
other instruments of all modifications, adaptations and translations of
the Licensed Software it makes or causes to be made, and Licensee may
freely use them, but for Licensee's internal use only and not by any
other person. All such modifications, adaptations, and translations
shall remain subject to all confidentiality and nondisclosure
provisions of this Agreement.
4.11 TAXES, DUTIES, ETC.
The license fees stated herein are for the defined Software only and
are exclusive of all taxes, duties, and other governmental charges. The
Licensee agrees to pay any and all taxes, duties, and other
governmental charges on the Licensed Software however designated or
levied whether or not specifically included in this Agreement,
excluding Licensor's income taxes.
4.12 ACCEPTANCE/DELIVERY/DEPOSIT
4.12.1 Acceptance: Licensor shall deliver the current general release
version of Licensed Software in magnetic form, tape or floppy
disk, compatible with the Designated Computer within 14 days
of the on-site installation, unless Licensee and Licensor
agree upon another date in writing. It shall be considered
that the Licensed Software programs have been accepted by the
Licensee when the programs have been loaded on the designated
computer and the main menu for the licensed software can be
displayed on a screen.
4.12.2 Delivery: The date the Licensee has possession of the Licensed
Software.
4.12.3 Deposit: Licensee recognizes that any deposit paid under this
agreement will be utilized immediately in preparation of
installation, set up of documentation and administration, and
order processing costs. Should Licensee cancel this agreement
Licensor reserves the right to charge Licensee at Licensor's
current rates or a minimum of 30 percent of the total initial
license fee, whichever is greater, for any expenses incurred
between Licensee signing contracts and canceling same. The
aforementioned expenses will be deducted from any deposits
paid.
4.13 ASSIGNMENT
This Agreement is assignable by Licensor upon written notice to
Licensee. This Agreement is not assignable by Licensee without written
consent of Licensor. In the event of assignment, the promises and
covenants herein contained shall continue to be binding upon the
original parties.
4.14 LIMITATION OF USE
Licensee shall not, without the prior written permission of Licensor,
use the Licensed Software except to process the normal and regular
business information of Licensee. Licensee is expressly prohibited from
using the Licensed Software to process data from other businesses,
parties, or corporations for compensation of any kind whatsoever
without the expressed written consent of Licensor in advance.
4.15 DEFINITIONS
4.15.1 "Software": Computer programs, routines, and other proprietary
system information, which when applied to a computer would
enable or permit the same to perform the intended tasks. This
definition of software fully contemplates that the computer
programs may be transferred or transposed between or among
various typed listings, paper printouts, magnetic media and
may be stored in computer language and may be in the form of
regularly typed listings, paper printouts, or magnetic media,
and may be
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stored in memory devices of various types including random
access memory, read only memory, disks or diskettes, and the
like.
4.15.2 "Confidential Information": Licensed Software and all
information related to the Licensed Software, including, but
not limited to source code, object code, algorithms, screen
displays, file designs, report formats, and documentation.
4.15.3 "Consultant": a person or company under Licensee's direction
or control, but not an employee of the Licensee, who shall be
given access to the Source Code, Software, or Confidential
Information. Consultants are required to sign a
confidentiality and nondisclosure agreement with Licensor
before they are given access to the Software by Licensee.
4.15.4 "Copy": Any reproduction of any of the software, in whole or
in part, in any form whatsoever, including but not limited to
printouts of any form in any computer language. Also included
are recordings or reproductions on any recordable material
including but no limited to magnetic tapes, disks, diskettes,
in any language or form.
4.15.5 "Use": Operating the Licensed Software on the designated
computer at the Designated Computer Site for the express
purpose of fulfilling the regular and normal business
activities and duties of the Licensee.
4.15.6 "Source Code": The actual words, phrases, sentences, and
paragraphs of the Licensed Software that comprise the program
commands that when operated on by the computer, cause the
computer to act according to said commands. Some Source Code
must be compiled translated by the computer into machine
readable command code.
5. GENERAL:
5.1 DEFAULT
It is a default under this Agreement if any one or more of the
following events occur and Licensor is adversely affected:
5.1.1 Licensee breaches any one or more of the covenants, terms or
conditions of this Agreement to be paid, performed, or
complied with by Licensee; or
5.1.2 Licensee becomes bankrupt or insolvent
In the event that a default on the payment terms occur on this
agreement, Licensor may exercise his rights of enforcement under the
Uniform Commercial Code in force in the State in which the Licensee
resides at the date of this security agreement and, in conjunction
with, addition to, or substitution for those rights, at Licensor's
discretion, may
5.1.3 Section Removed
5.1.4 Enter upon Licensee's premises to take possession of,
assemble, and collect the Collateral or render it unusable.
5.2 SECTION REMOVED
5.3 NOTICES
All other notices required hereunder shall be given in writing and
shall be delivered or sent by postage prepaid mail addressed to the
parties at their addresses first mentioned, or at such other addresses
as either party may designate to the other by notice as provided in
this section. Notices shall be deemed effective upon their deposit into
the U.S. Mail, properly addressed and postage prepaid.
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5.4 INVALID PROVISIONS
If any provision of this Agreement be invalid or unenforceable, then
the remainder of this Agreement shall not be affected thereby.
5.5 ENTIRE AGREEMENT
This Agreement supersedes all prior agreements, letters of intent,
negotiations, representations and proposals, written or oral, requests
for proposals, or previous discussions of the parties. There have been
no other promises or inducements, oral or written, given by any party
to the other to enter into this Agreement. The parties agree that this
Agreement or any term or provision thereof shall not be modified in any
manner whatsoever without the written authorization of both parties
hereto and signed by both an authorized representative of Licensee and
by an authorized representative of Licensor.
5.6 ARBITRATION
If any controversy or dispute arises out of this Agreement, or the
breach thereof, the parties will endeavor to settle such dispute
amicable. If the parties shall fail to settle any dispute, such dispute
shall be finally settled by binding arbitration conducted in Clark
County, Washington. All arbitration shall be in accordance with the
then existing Commercial Arbitration rules of the American Arbitration
Association, and judgment upon the award rendered by the competent
jurisdiction to obtain temporary relief pending resolution of the
dispute through arbitration. The parties hereby agree that service of
any notices in the course of such arbitration at their respective
addresses as provided for in this Agreement shall be valid and
sufficient. If either party seeks to enforce its rights under this
Agreement, the non-prevailing party shall pay all costs and expenses
incurred by the prevailing party.
5.7 ATTORNEY FEES
The prevailing party in any arbitration or lawsuit concerning this
Agreement or any matter related thereto shall be entitled to any award
of reasonable attorney fees and costs from the other, including fees
incurred through trial, appeal or in bankrupt proceedings. Licensor
shall be entitled to recover reasonable attorney's fees incurred with
regard to collection of payments due to repossession or disposal of
collateral, without regard to the institution of legal proceedings.
5.8 HIRING OF JENKON PERSONNEL
5.8.1 Licensee understands that significant time and resources have
been invested by Licensor into selecting, training, educating,
and developing each Licensor employee. Licensee agrees,
therefore, that significant harm and damage would result to
Licensor in the event Licensor's employee was to terminate
employment with Licensor to work under the employ of Licensee,
whether as an employee or as a Consultant.
5.8.2 Licensee agrees that no discussion of employment or
compensation in any form whatsoever, or the possibility of the
same including offers of employment, compensation, or other
arrangements of forming a business relationship directly with
any employee will be made by Licensee or his representative or
agent unless express written permission has been granted by
Licensor in advance. The parties hereto do hereby acknowledge
that Licensor would suffer damage in the event that an
employee of Licensor were to become employed in any way by
Licensee within one (1) year of the employees termination from
Licensor.
5.8.3 The parties further agree that it would be difficult to
ascertain with any degree of certainty the amount of damages
which would be sustained by Licensor. In light of the
foregoing, the parties hereto do hereby agree that in the
event an employee of Licensor does become so employed by
Licensee within the time period set forth herein, Licensee
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shall pay to Licensor as liquidated damages an amount equal to
twelve (12) months of the employee's last salary at Licensor,
which sum shall be compensation to Licensor for the
inconvenience, disruption, recruitment, training, education
and development of the replacement employee. Said payment by
Licensee to Licensor shall be made within thirty (30) days of
the date on which the former employee of Licensor commences
employment with Licensee.
5.8.4 Licensor warrants that no known viruses are contained in the
Licensed Software.
5.9 MILLENNIUM COMPLIANCE
Seller warrants that Licensed Software shall function in accordance
with the Specifications before, during, and after January 1, 2000,
without any change in operations associated with the advent of the new
century.
6. AUTHORIZED SIGNATURE
This Agreement shall be binding upon Licensee and Licensor only at such
time as it has been signed by an Authorized Officer of the Licensee and
by an Officer, identified below, of Licensor.
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ACCEPTED BY: Summit V, Inc. IS 14, Inc.
(Maxxis Group, Inc.)
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NAME (PLEASE PRINT) Brian W. Maggs James W. Brown
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NAME (SIGNATURE) /S/ Brian W. Maggs /s/ James W. Brown
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TITLE: Executive Vice President President
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DATE: 2/10/97 2/2/97
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