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AMENDED AND RESTATED
SOFTWARE LICENSE AGREEMENT
This Amended and Restated Software License Agreement ("Agreement") is
effective as of September 29 , 1999 by and between Dicom Imaging Systems, Inc.,
a Nevada corporation ("Dicom") and Xxxxxxx Xxxxxxxx ("Licensee").
WHEREAS, Dicom and Licensee previously entered into that certain
Software License Agreement ("Previous Agreement") of even date herewith; and
WHEREAS, Dicom and Licensee desire to amend and restate the Previous
Agreement in the form of this Agreement; and
WHEREAS, Due to covenants Dicom has made to certain holders of its
common shares, no new equity issuance may be made by Dicom at the present time;
WHEREAS, Licensee desires to have a strategic alliance with Dicom which
both parties anticipate will lead to a future equity investment by Licensee into
Dicom and Licensee's entering into this Agreement is explicitly conditioned upon
Dicom's meeting certain corporate milestones necessary to facilitate this
strategic alliance and equity investement;
WHEREAS, Licensee understands that Dicom has presented Licensee with an
opportunity to purchase a License to certain Dicom software which Licensee
desires to purchase;
NOW THEREFORE, in consideration of the mutual covenants the sufficiency
of which is hereby acknowledged, the parties agrees as follows:
1. LICENSE. In consideration for the Payment Amount, as noted below,
Licensee is hereby granted an exclusive license ("License") to the Dicom
software product known as Image Explorer ("Licensed Software"). Dicom agrees
that it may not sell or sublicense the Image Explorer, except under the terms of
this License. Licensee acknowledges that it takes this License subject to the
conditions and exclusions of the License Agreement between Dicom and Torchmark
Holdings, Ltd. and that Licensee has been provided a copy of the same.
2. PAYMENT AMOUNT. In consideration for the License, Licensee agrees to
pay Dicom $600,000 (the "Payment Amount") in accordance with this Section 2.
$100,000 of the Payment Amount shall be paid by Licensee immediately upon
execution of this Agreement ("Initial Payment"). The remaining Payment Amounts
shall be due in equal installments on the 30th of November, 1999; the 31st of
January, 2000 and the 31st of March, 2000; the 31st of May; and the 31st of
July ("Subsequent Payments"). Licensee's obligation to make Subsequent Payments
is subject to Section 4 of this Agreement.
3. ROYALTY PAYMENTS.
a. EXCLUSIVITY OF RESALE. Dicom and the Licensee acknowledge that
the Licensee is not in the business of dental software and the
only practical method for Licensee to sell the Licensed
Software is via Dicom and its value added resellers or via a
third party distributor or value added reseller. Although
Licensee would be free to sell the Licensed Software through a
third party or other value added resellers not affiliated with
Dicom, in consideration for the Royalty Payment, as defined
below, Licensee agrees not to do so.
b. BEST EFFORTS TO SELL LICENSED SOFTWARE. Dicom agrees,
covenants and warrants use its best efforts to cause the
Licensed Software to be sold to retail or wholesale
purchasers.
c. ROYALTY PAYMENT. Dicom agrees to pay fifty percent of the
gross revenue received and collected, less returns, from the
sale of the Licensed Software to Licensee as a Royalty
Payment. Such a Royalty Payment shall continue until
extinguished in accordance with Section 4 of this Agreement.
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d. PAYMENT SCHEDULE. Dicom shall make the Royalty Payment to
Licensee within fifteen days of the end of each calendar month
in which a sale of the Licensed Software is made by Dicom
("Due Date"). Dicom agrees that any payments not tendered by
the Due Date shall be subject to a Late Payment Charge of 1.5%
per month until paid in full.
e. RIGHT OF INSPECTION. Dicom agrees to allow the Licensee to
inspect the books and records of Dicom from time-to-time and
upon at least thirty-six hours of advance notice in order to
insure compliance with this Section 3.
4. CORPORATE RELATIONSHIP AND MILESTONES. The Parties understand that
their mutual obligations hereunder are conditioned upon the fulfillment of
certain agreed upon milestones which are elaborated in this Section 4.
Furthermore, the Parties are contemplating a future strategic alliance whereby
Licensee would make an equity investment in Dicom. Licensee's obligations
hereunder and this future relationship are conditioned upon Dicom's meeting
certain corporate milestones at outlined in this Section 4.
a. PUBLIC COMPANY STATUS. Dicom has represented to Licensee and
Licensee has specifically relied upon Dicom's representation
that Dicom is a fully reporting public entity, filing timely
periodic reports under the Securities and Exchange Act of
1934. Dicom also represents that its common shares will be
trading on the National Association of Securities Dealers'
("NASD") Over the Counter Bulletin Board Exchange within sixty
days from the effective date of this Agreement. In the event
that Dicom should be approved for such trading by the NASD
("Approval"), the payment due on November 30, 1999 under
Section 2 of this Agreement shall be immediately due and
payable. If the NASD has not approved Dicom's application for
trading by November 30, 1999, Licensee may elect to withhold
Subsequent Payments under this Agreement until such time as
Approval has been granted. If Approval has not been granted by
January 31, 2000, Licensee may elect to terminate this
Agreement pursuant to section 5 hereof.
b. CORPORATE MILESTONES. Dicom has represented to Licensee that
there will be total sales of at least $400,000 of the Licensed
Software by January 31, 2000, total sales of at least $600,000
by March 31, 1999, total sales of at least $800,000 by May 31,
1999 and total sales of $1,000,000 by June 30, 1999 ("Sales
Milestones"). If any of the Sales Milestones are not met,
Licensee may immediately terminate this Agreement pursuant to
section 5 below.
5. TERMINATION. The term of this Agreement is three years. At the end
of three years, any Royalty Payments due Licensee shall cease and Licensee's
rights hereunder, including the License, shall be extinguished. This Agreement
may be terminated by either party pursuant to a specific provision of this
Section 5 as described below.
a. TERMINATION BY DICOM. Dicom may terminate this Agreement at
any time by refunding the Initial Payment, the Subsequent
Payments (to the extent that these have been tendered) and an
early Termination Fee of $50,000. Any payments due by Dicom
under this Section shall be offset by the amount of any
Royalty Payments actually made by Dicom to Licensee.
b. TERMINATION BY LICENSEE. Licensee may terminate this agreement
as indicated in section 4 of this Agreement. If Licensee
elects to terminate this Agreement, he is entitled to receive
the return of the Initial Payment and any Subsequent Payments
made, less any Royalty Payments actually made by Dicom to
Licensee. The Licensee's rights hereunder, and the Royalty
Obligations of Dicom, are not extinguished until the refund
amount is paid in full. Dicom agrees that the sums due under
this Section 5 (b) are to be paid within 30 days of
termination under this Section 5 (b).
6. LEGAL OBLIGATION. Licensee understands that this Agreement is a
legal obligation of Licensee enforceable in accordance with its terms.
Furthermore, Licensee specifically understands and agrees that he will be
obligated to make the full amount of the Initial Payment and Subsequent Payments
provided that Dicom satisfies the conditions in Section 4 of this Agreement.
7. MISCELLANEOUS PROVISIONS. This Agreement shall inure to the benefit
of, and be binding upon, the successors, assigns, heirs, executors and
administrators of the Parties hereto. This Agreement represents the entire
agreement and understanding between the
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Parties concerning the subject matter hereof, including any transactions ever
entered into or contemplated between the Parties and supersedes and replaces any
and all prior agreements and understandings concerning the same. This Agreement
may only be amended in writing signed by the Parties. This Agreement shall be
governed by the laws of the State of Nevada. This Agreement may be executed in
counterparts, and each counterpart shall have the same force and effect as an
original and shall constitute an effective, binding agreement on the part of
each of the undersigned.
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IN WITNESS WHEREOF, the undersigned respective parties have caused this
Agreement to be executed in their names effective as of the day and year first
above written.
On behalf of Dicom Imaging Systems, Inc.
Dicom Imaging Systems, Inc.
a Nevada corporation
By:
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Title:
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Licensee:
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Xxxxxxx Xxxxxxxx
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