Exhibit 10.6
R&D SYSTEMS COMPANY
CROSS LICENSE AGREEMENT
WITH
THE DISTRIBUTION TEAM, INC.
This Cross License Agreement ("Agreement") is entered into this 16th day of
August, 1995 (the Effective Date), by and between R&D Systems Company, ("R&D"),
a Colorado corporation having its principal place of business at 0000 Xxxxx
Xxxxxxx Xxxx., Xxxxx 000, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000 , and The
Distribution Team, Inc. ("DT"), a Texas Corporation having its principal
location at 0000 Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxx Xxxxxxx, Xxxxxxxx,
00000.
R&D either owns or has the right to license the software products ("Software")
and their accompanying printed material ("Collateral Material") covered by this
Agreement;
R&D desires to grant and DT desires to accept a license to use the Software
subject to the terms and conditions contained herein;
In consideration of the above premises and the mutual covenants and conditions
contained herein, R&D and DT agree as follows:
1. Recitals.
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(a) R&D Systems Company. R&D is engaged in the business of developing,
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distributing and licensing distribution inventory management Software called
Trend, as well as selling the computer hardware on which to run said Software.
Among the Software modules developed and licensed by R&D is an on-line
Operations Guide ("Operations Guide").
(b) Intellex: Intellex, a division of R&D, is engaged in the business of
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developing strategic data warehouse applications for PC networks primarily to
complement the operational systems (like Trend) offered by other R&D divisions.
Included with Intellex's initial Software product offering, is a subsystem
Software product entitled Manager's Handbook ("Handbook"). This subsystem
allows the user access to expert advice from ideas generated by industry
experts, and supplied to DT or the Intellex Division for inclusion in the
Handbook and which may be licensed along with the Operations Guide.
(c) The Distribution Team: The Distribution Team, hereinafter "DT" desires to
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obtain a copy of the Handbook code in order to develop a specific expert module
incorporating the expertise and advice of an industry expert Xxxxxx Xxxxxx,
whose philosophies and teachings will be incorporated in a specific Handbook
called the "GGHandbook", or other handbooks at their sole discretion.
2. Grant of License. R&D grants to DT and DT accepts, the following non-
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transferable, non-exclusive rights:
(a) A perpetual license to market and sublicense the Handbook Software in
source or object code format as a standalone application outside of the R&D
and/or Intellex customer base, (unless modified in writing to the contrary); DT
acknowledges they are receiving a copy of the Handbook Software in both source
and object code format, and may sublicense source and object code to its'
customers. DT agrees to provide a list of its customers so licensed to R&D on a
quarterly calendar basis.
(b) A $2,000 royalty shall be paid to DT on every GGHandbook Software module
sold with each new Operations Guide customer licensed by R&D. For the purposes
of this Agreement, a new Operations Guide customer shall be defined as a
customer licensing Software from R&D wherein Operations Guide is licensed along
with other Software modules or products and is part of an overall Software
package licensed thereunder. R&D shall have no limitations on the prices for
such Software charged to its' customers, and R&D shall also have total
discretion as to whether such GGHandbook is sold as a separate module or
sold/bundled within its Software. If the SHIMS Software, owned by R&D and
marketed through the UDS division of R&D, uses Operations Guide concepts or
chooses to market the GGHandbook, the same $2,000 royalty will apply. Payments
will be made to DT on a quarterly basis and will be disbursed by R&D within
thirty (30) days of the close of a calendar quarter (March, June, September and
December). To qualify for payment, a sale must have been recognized as revenue
by R&D and R&D must have been paid in full by customer. R&D hereby commits to
including the GGHandbook in each license of its Operations Guide. The $2,000 per
license royalty may be fully paid up at any time by R&D via the execution of a
one-time $500,000 license payment to DT less any previously paid $2,000 royalty
payments accumulated up until execution of this one-time buy-out provision. Upon
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execution of the buy-out provision by R&D, DT shall be released from any support
or update obligations on the GGHandbook and R&D shall be granted a perpetual
license for the GGHandbook and all related Collateral Materials. Updated
Collateral materials and releases of the GGHandbook Software will become the
responsibility of R&D for its' own customers.
(c) An option to market GGHandbook directly into R&D and/or Intellex customer
base. Should DT choose to exercise this option, they will:
1) Notify R&D in writing of their intention to exercise the option sixty
(60) days in advance of the date they wish to begin marketing;
2) Assume all responsibilities for billing and collections for sales of
Handbook into the R&D and/or Intellex customer base; and
3) Pay R&D a pre-negotiated royalty (in writing) on any sale into the
R&D and/or Intellex customer base (regardless of actual sale price by DT to
customer).
(d) The understanding between the parties that, should a customer license
GGHandbook from DT and later become a customer of R&D/Intellex for an
operational system such as Trend or SHIMS or another like strategic system such
as Profit Workbench, DT will not receive the $2,000 royalty payment.
Furthermore, in such cases, the Intellex division of R&D will not pay its
royalty payment specified in section 2.c.4.
3. Grant from DT to R&D: R&D shall be granted the right from the effective
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date of this Agreement until January 1, 1997, to purchase from DT books and
videos known as the Xxxxxx Xxxxxx books and videos owned by DT at a fifty
percent (50%) discount off current list price (Attached as Exhibit 1.) After
January 1, 1997, R&D's discount will be eighteen percent (18%) of the current
list price.
4. Ownership of Software. The Software, Handbook (including any images,
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"applets", photographs, animations, video, audio, music and text incorporated
into the Software) is owned by R&D or its suppliers and DT shall have no
ownership interests therein. The Software is protected by United States
copyright laws and international treaty provisions. Therefore, DT must treat
the Handbook Software like any other copyrighted material (e.g., a book or
musical recording) except that they may either (a) make one (1) copy of the
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Handbook Software solely for backup or archival purposes, or (b) transfer the
Handbook Software to a single hard disk provided they keep the original solely
for backup or archival purposes. DT agrees to take all reasonable steps to
protect the confidentiality of the Handbook Software and Collateral Material.
Likewise, the data stored in the Handbook database is owned by DT and is
protected by United States copyright laws and international treaty provisions.
R&D agrees to take all reasonable steps to protect the confidentiality of DT's
copyrighted material.
R&D acknowledges that DT shall have full ownership of the GGHandbook and R&D
shall have no rights of ownership therein.
5. Technical & other Support Services from R&D. R&D will provide DT with
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unlimited access to the Intellex/R&D Bulletin Board. Should DT need technical
support other than through the Bulletin Board, R&D will make it available to DT
subject to the applicable fees and terms in place at the time such support is
requested by DT. R&D will supply DT with contacts of all third party tool
vendors to enable DT to establish their own relationships with such vendors. R&D
will provide assistance to DT via reasonably requested and required resources,
which may be a combination of personnel, video and personal computer equipment.
Accounting and other administrative support services will be supplied at $250
per month or $3,000 per year and so long as R&D continues to receive the
preferred royalty rate of $2,000. The adequacy of such fees will be reviewed
annually by R&D's Board of Directors. All costs of duplication and distribution
of GGHandbook Software and Collateral Materials will be the sole responsibility
of DT.
6. Confidentiality. DT agrees that they shall, during the term of this
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Agreement, take all steps which are reasonable to safeguard the confidentiality
of, and proprietary rights to, the confidential information ("Confidential
Information") of the other party which may be disclosed as part of the execution
of this Agreement (including, but not limited to, product plans, designs,
business plans, technical specifications, research, customer or financial data)
and shall not, without prior written consent of R&D, (i) use such Confidential
Information for their own benefit or the benefit of any third party except for
purposes expressly provided for in this Agreement, or (ii) disclose such
Confidential Information to any third party; provided, however, that this
provision shall not be construed to restrict the disclosure of information which
(a) is publicly known at the time of its disclosure to DT, (b) is lawfully
received by DT from a third party not bound to a confidential relationship to
R&D, (c) was already known by DT prior to entering into this Agreement or (d) is
required by law to be disclosed.
7. Representations and Indemnification by DT.
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(a) DT represents and warrants that they have the full power and authority to
enter into this Agreement and that they shall make no representations and/or
warranties to their customers regarding the use of the
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Software except as may be contained in the documentation published by R&D and
approved by DT.
(b) DT shall indemnify and hold R&D harmless from any claim, action or other
liability whatsoever resulting from the use of the Software and Collateral
Materials by their customers or from representations made by DT to their
customers in breach of Section 7(a).
(c) DT shall be responsible for all marketing activities for their sales of
Handbook and their associated costs. Further, DT shall be responsible for
all billing and collection activities for their customers.
(d) DT shall be responsible for distribution and support of Handbook to their
customers.
(e) DT shall be responsible for any enhancements made to the data stored in
the Handbook database and agrees to provide such enhancements back to R&D
for their inclusion into R&D'vs copies of Handbook no less than thirty (30)
days prior to their release to their customers.
(f) Should DT make any programmatic changes to the Handbook application or
Handbook database, they agree to inform R&D of such changes and provide such
changes back to R&D for inclusion into their copies of the Handbook application
no less than sixty (60) days prior to the release of such changes to R&D's
customers, should R&D elect at their sole option to include such changes.
8. Representations and Indemnification by R&D.
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(a) R&D represents and warrants that it has the full power and authority to
enter into this Agreement and that it shall make no representations and/or
warranties to DT's customers regarding the use of the Software except as
may be contained in the documentation published by R&D as approved by DT.
(b) All Handbook Software modules delivered by R&D to new customers within the
R&D/Intellex customer base will require DT to provide a registration code
upon their installation. Furthermore, they will include a registration
card which must be completed and returned to DT for their tracking.
(c) R&D will invest the development resources necessary to provide a standalone
Handbook Software application with video drill down capabilities to the
Handbook.
Should DT wish any enhancements or new features be added to the Handbook
application, R&D will bid the time necessary to make such enhancements to them
subject to the applicable fees and terms in place at the time it is requested by
DT.
(d) R&D agrees to develop an entry level set of documentation for Handbook and
a "how to" video and provide it to DT for their use in the sales of Handbook to
their customers.
(e) R&D agrees not to build a competing product to the GGHandbook, but shall
not be restricted from building any other expert Handbook.
9. R&D's Limited Warranty. R&D warrants that the Software will perform
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substantially in accordance with accompanying printed material for a period of
sixty (60) days from the date of receipt, so long as the Software is properly
used in the operating environment specified in the accompanying printed
material.
(a) Remedies. R&D's entire liability and DT's exclusive remedy shall be, at
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R&D's option, either (a) return of the paid price or (b) repair or replacement
of the Software that does not meet R&D's Limited Warranty and that is returned
to R&D within the warranty period. This Limited Warranty is void if failure of
the Software has resulted from accident, abuse, or misapplication. Any
replacement Software will be warranted for the remainder of the original
warranty period or thirty (30) days, whichever is longer.
(b) No Other Warranties. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW,
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R&D DISCLAIMS ALL OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE, WITH RESPECT TO THE SOFTWARE, AND THE ACCOMPANYING PRINTED MATERIALS.
(c) No Liability for Consequential Damages. TO THE MAXIMUM EXTENT PERMITTED BY
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APPLICABLE LAW, IN NO EVENT SHALL R&D OR ITS SUPPLIERS BE LIABLE FOR ANY DAMAGES
WHATSOEVER (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS,
BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION, OR OTHER PECUNIARY LOSS)
ARISING OUT OF THE USE OR INABILITY TO USE THESE R&D PRODUCTS, EVEN IF R&D HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. R&D'S MAXIMUM LIABILITY
REGARDLESS OF THE FORM OF ACTION SHALL NOT EXCEED THE INITIAL LICENSE FEE PAID
BY CUSTOMER FOR THE SOFTWARE.
10. DT's Limited Warranty. DT warrants that the data will perform substantially
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in accordance with accompanying printed material for a period of sixty (60) days
from the date of receipt, so long as the data is properly used in the operating
environment specified in the accompanying printed material.
(a) Remedies. DT's entire liability and R&D's exclusive remedy shall be, at
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DT's option, either (a) return of the paid price or (b) repair or replacement of
the data that does not meet DT's Limited Warranty
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and that is returned to DT within the warranty period. This Limited Warranty is
void if failure of the data has resulted from accident, abuse, or
misapplication. Any replacement data will be warranted for the remainder of the
original warranty period or thirty (30) days, whichever is longer.
(b) No Other Warranties. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, DT
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DISCLAIMS ALL OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE, WITH RESPECT TO THE DATA, AND THE ACCOMPANYING PRINTED MATERIALS.
(c) No Liability for Consequential Damages. TO THE MAXIMUM EXTENT PERMITTED BY
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APPLICABLE LAW, IN NO EVENT SHALL DT OR ITS SUPPLIERS BE LIABLE FOR ANY DAMAGES
WHATSOEVER (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS,
BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION, OR OTHER PECUNIARY LOSS)
ARISING OUT OF THE USE OR INABILITY TO USE DT'S PRODUCTS, EVEN IF DT HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
11. General.
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(a) Reservation of Rights and Remedies. In addition to any specific right or
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remedy provided by this Agreement, R&D and DT reserve all other rights and
remedies available by law.
(b) Force Majeure. Neither party shall be liable for any delays in the
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performance of any of their obligations under this Agreement (other than the
obligation to issue payments) due to causes beyond their reasonable control,
including but not limited to, fire, strike, war, riots, acts of any civil or
military authority, judicial action, acts of God, or other casualty or natural
calamity for so long as and to the extent that the effects of such circumstance
continue.
(c) Severability. If any one or more of the provisions of this Agreement are
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finally adjudicated to be partially or entirely unenforceable by a court of
competent jurisdiction, then this Agreement shall be construed as if such
unlawful provision had not been contained within.
(d) Waiver of Performance. A waiver of any breach or default under this
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Agreement shall not be a waiver of any other or subsequent breach or default.
Failure or delay by either party to enforce compliance with any term or
condition of this Agreement shall not constitute a waiver of such term or
condition.
(e) Taxes. All charges in this Agreement are exclusive of sales and use taxes.
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If any such taxes are imposed on transactions covered by this Agreement by any
state, local, federal or special jurisdiction in the United States, the selling
party, either DT or R&D, agrees that the collection and disbursement of such
taxes are their responsibility.
(f) Notices. Required notices under this Agreement shall be deemed delivered
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when (i) personally delivered, (ii) faxed with confirmation to a designated fax
number, or (iii) upon signed receipt when delivered by certified or registered
mail. Such notices shall be sent to the other party at their address set forth
on the first page of this Agreement.
(g) Export Administration. This Agreement shall be subject to all applicable
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United States and Territory laws, rules and regulations relating to the Software
and Collateral Materials including export regulations of the U.S. Commerce
Department. DT and R&D shall comply with all such laws, rules and regulations.
(h) Governing Law. This Agreement shall be governed by and construed to be in
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accordance with the laws of the State of Colorado and the parties hereto agree
to submit to the exclusive jurisdiction of the U.S. District Court, District of
Colorado.
(i) Effect of Agreement. This Agreement embodies the entire Agreement and
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understanding of the parties and supersede any and all prior agreements,
arrangements and understandings, whether verbal or in writing, relating to
matters provided for herein. No amendment, waiver of compliance with any
provision or condition hereof, or consent pursuant to this Agreement shall be
effective unless evidenced by an instrument in writing signed by the parties.
The captions are for convenience only and shall not control or affect the
meaning or construction of the provisions of this Agreement.
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IN WITNESS WHEREOF, the undersigned have signed this Agreement as effective the
day and year first above written.
R&D SYSTEMS COMPANY THE DISTRIBUTION TEAM, INC.
By: /s/ X. X. Xxxxxxxxxx By: /s/ Xxx Xxxxxx
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Printed Name: X. X. Xxxxxxxxxx Printed Name Lammle, Guy
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Title: Chief Admin. Officer Title: Chairman
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Date: 8/16/95 Date: 8/16/95
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v
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AMENDMENT #1 TO THE R&D SYSTEMS COMPANY
CROSS LICENSE AGREEMENT WITH THE DISTRIBUTION
TEAM, INC. DATED AUGUST 16, 1996
As R&D Systems Company is exercising the rights granted by The Distribution Team
under the above referenced Agreement effective this 14th xxxx of August, 1996 to
purchase a perpetual license to the GGHandbook for $500,000 less any royalties
paid to date, said Agreement is hereby amended as follows:
SECTION 2(B) GRANT OF LICENSE is DELETED in its' entirety.
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SECTION 2 (D) GRANT OF LICENSE is amended as follows: THE LAST
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SENTENCE..."Furthermore, in such cases, the Intellex division of R&D will not
pay its royalty payment specified in Section 2.c.4" IS DELETED.
SECTION 5 TECHNICAL & OTHER SUPPORT SERVICES FROM R&D is hereby AMENDED as
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follows. ..."Accounting and other administrative support services will be
supplied at $250 per month or $3,000 per year and so long as R&D continues to
receive the preferred royalty rate of $2,000." shall be DELETED.
All other terms and conditions of the Agreement shall remain unchanged.
Ownership of the Handbook and the Manager's Handbook shall continue to reside
with R&D Systems. Ownership of the GGHandbook shall continue to reside with The
Distribution Team, Inc.
IN WITNESS WHEREOF, the undersigned have signed this Agreement effective the day
and year first written above.
R&D Systems Company The Distribution Team, Inc.
By: /s/ X. X. Xxxxxxxxxx By: /s/ Xxxxx X. Xxxxxxxx
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Name: X. X. Xxxxxxxxxx Name: Xxxxx X. Xxxxxxxx
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Title: Chief Operating Officer Title: President
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Date: 8/16/96 Date: 8/25/96
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