EXHIBIT 10.54
SOFTWARE LICENSE AGREEMENT
THIS AGREEMENT is made and effective as of the 1st day of February, 2007 (the
"Effective Date"), by and between Performance Health Technologies, Inc., a
Delaware corporation with offices at 000 Xxxxx Xxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx
00000 (hereinafter referred to as "PHT") and StayHealthy, Inc., a Delaware
corporation with offices at 000 Xxxxxxx Xxxxx, Xxxxxxxx, XX 00000 (hereinafter
referred to as "STAYHEALTHY").
W I T N E S S E T H:
WHEREAS, STAYHEALTHY desires to include PHT's proprietary technology platform
known under the trademarked name "MotionTrack" in health care kiosks that are
being manufactured, marketed and maintained through STAYHEALTHY's partnership
with International Business Machines ("IBM") (the "Kiosks") to be developed and
placed by STAYHEALTHY in health clubs, schools, retail stores and homes; and
WHEREAS, the MotionTrack(TM) technology is incorporated into PHT's Core:Tx(R)
system, units of which shall be installed and incorporated into the Kiosks; and
WHEREAS, PHT desires to license the MotionTrack(TM) Software (as defined below)
to STAYHEALTHY for such purpose on the terms and conditions set forth herein.
NOW, THEREFORE, STAYHEALTHY and PHT agree as follows:
1. AGREEMENT
Subject to the terms hereof, PHT hereby grants to STAYHEALTHY and, to the extent
necessary to manufacture, market and maintain the Kiosks, to STAYHEALTHY's
licensee IBM, a non-transferable and non-exclusive license within the United
States of America to use the MotionTrack(TM) Software and the Core:Tx(R) Units
(as defined below) in the Kiosks for the purpose of measuring a user's range of
motion (the "Field of Use"). PHT agrees that during the term of this Agreement,
it shall not license the MotionTrack(TM) Software to any other person or entity
that markets or plans to market a device that is similar to, and may reasonably
be considered to be competing with, the Kiosks.
2. DEFINITIONS
As used in this Agreement:
A. "Affiliate" means any corporation which, directly or indirectly, controls or
is controlled by or is under common control with a party. For this purpose,
"control" shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such corporation
through the ownership of voting securities.
B. "Agreement" means this Software License Agreement and any and all
Attachments, Exhibits and Schedules hereto.
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D. "Day" or "days" means calendar days unless otherwise specified.
E. "Core:Tx(R) Units" or "Units" means all transceivers, base stations, straps,
hardware, and manuals designed to be used with the application for the
MotionTrack(TM) Software to be used in the Kiosks.
F. "Motiontrack(TM) Software" means PHT's proprietary measurement software
package and wireless motion and position sensing system known under the
trademarked name "MotionTrack", including (a) all of its computer programs
including, without limitation, software application programs, files, or
interfaces to operating systems and (b) all of its supporting documentation for
such computer programs, including, without limitation, input and output formats,
program listings, narrative descriptions, operating instructions and procedures,
user documentation, referral forms and source code and (c) all of the tangible
media upon which such programs are recorded, including, without limitation,
tapes, disks and diskettes.
Other capitalized terms used in this Agreement are defined in the context in
which they are used and shall have the meanings therein indicated.
3. TERM/TERMINATION
The term of this Agreement will begin as of the Effective Date, and will
continue for a period of three (3) years unless earlier terminated as set forth
herein. After that date, this Agreement shall continue on a year to year basis,
unless either party terminates by notice given to the other at least sixty (60)
days before the end of the then current term.
A. STAYHEALTHY's Termination Rights
STAYHEALTHY shall have the right to terminate this Agreement:
(i) for cause if PHT is in material breach of any of its obligations hereunder
provided STAYHEALTHY has first given PHT written notice specifying the nature of
such alleged breach in reasonable detail and PHT has failed to remedy the breach
within 30 days of such notice, if such breach is susceptible to cure;
(ii) as set forth in paragraph 5(b).
B. PHT's Termination Rights
PHT shall have the right to terminate this Agreement (i) for nonpayment if any
payment due hereunder shall be more than thirty (30) days overdue or (ii) if
STAYHEALTHY is in material breach of any of its non-payment obligations
hereunder provided PHT has first given STAYHEALTHY written notice specifying the
nature of such alleged breach in reasonable detail and STAYHEALTHY has failed to
remedy the breach within thirty (30) days of such notice, if such breach is
susceptible to cure.
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Upon any termination of this Agreement, PHT, with the assistance and cooperation
of STAYHEALTHY, shall be entitled to remove from the Kiosks, or otherwise render
inoperable, all of the Core:Tx(R) Units previously installed pursuant to this
Agreement. In addition, STAYHEALTHY agrees to return to PHT any and all copies
(on tape, disc, etc.) of the MotionTrack(TM) Software in its possession.
4. PHT OBLIGATIONS
During the period of this Agreement:
A. PHT will provide STAYHEALTHY and IBM with technical support as follows: for a
period of sixty (60) days from the date of installation of a Core:Tx(R) Unit, a
service representative from PHT will be available by toll-free telephone during
regular business hours (9 a.m. - 5 p.m. Eastern time, except for weekends and
holidays) to resolve any customer issues with the Unit. For a period of one year
from the date of installation, the Unit shall be covered by the product warranty
set forth in paragraph 9 below.
B. PHT will be responsible, at its sole cost and expense, for all initial
modifications to the MotionTrack(TM) Software necessary to ensure that it is
compatible with the software currently used in the Kiosk (as such software
exists as of the date of this Agreement, the "Current Software") and the
operating systems currently used by STAYHEALTHY (as such operating systems exist
as of the date of this Agreement, the "Current Operating Systems"). STAYHEALTHY
acknowledges that PHT will be engaging a third party provider to perform such
integration services. If PHT determines that such integration is not technically
feasible or that it can not be accomplished without undue cost or delay, then
PHT shall have the right to terminate this Agreement and neither party shall
have any further liability to the other.
5. OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS
A. Subject to this Agreement, PHT shall retain sole ownership and all other
intellectual property rights in the MotionTrack(TM) Software and related
technology, including any modifications, enhancements and updates
("Modification"), and any new version ("New Version") developed by PHT during
the term of this Agreement.
B. Except as set forth in paragraph 4(B) above and below, PHT shall not be
obligated to make any Modifications during the term of this Agreement, PROVIDED,
HOWEVER, that STAYHEALTHY shall have the right to terminate the Agreement upon
reasonable notice to PHT if PHT is not able to perform a requested Modification
on a basis acceptable to STAYHEALTHY. For any such Modification, PHT and
STAYHEALTHY will jointly determine a budget and STAYHEALTHY shall be responsible
for payment for the costs of any such Modification.
C. PHT shall not be obligated to develop any New Version of the MotionTrack(TM)
Software. For the purposes of this Agreement, a "New Version" is defined as a
software program containing significant new functionality. If STAYHEALTHY
desires to have PHT develop a New Version, then it shall pay PHT for development
of the New Version on a time and materials basis, and shall reimburse PHT for
the costs of installation of the New Version as reasonably determined by PHT. If
PHT develops a New Version independently of STAYHEALTHY, then it shall offer it
to STAYHEALTHY at a price to be determined by negotiation (but on at least as
favorable terms as it offers the New Version to any other licensee).
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D. If STAYHEALTHY desires to develop a Modification that will allow the
MotionTrack(TM) Software to be used for application(s) that are outside of the
Field of Use (the "STAYHEALTHY Modification"), it shall first obtain the written
consent of PHT. If PHT permits the STAYHEALTH Modification, then the parties
agree that (i) STAYHEALTHY shall develop the STAYHEALTHY Modification at its
sole cost and expense (ii) STAYHEALTHY and PHT shall jointly own all right,
title and interest in and to the STAYHEALTHY Modification and (iii) all license
fees and other revenues (net of expenses, including development costs) derived
from the application(s) that use the STAYHEALTHY Modification shall be shared
equally by STAYHEALTHY and PHT. PHT shall retain all ownership rights in and to
the MotionTrack(TM) Software; provided, however, that PHT shall permit the
MotionTrack(TM) Software to be licensed with the STAYHEALTHY Modification for so
long as the application(s) using the STAYHEALTHY Modification are licensed to
third parties (regardless of whether this Agreement remains in force and
effect).
6. PHT COMPENSATION
In consideration for the License granted hereunder and for the other
undertakings by PHT, STAYHEALTHY shall pay PHT as follows:
1) For each Kiosk equipped with a Core:Tx(R) Unit, a fee (the "Per
Unit Fee") equal to a percentage of PHT's actual manufacturing costs based on
the number of Units covered by the purchase order as set forth below :
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Number of Units Ordered Percentage of Actual Manufacturing Costs
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Up to 500 units 130%
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501 to 1,000 units 125%
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1,001 to 5,000 units 120%
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5,001 and over 115%
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The Per Unit Fee shall be paid one half at the time of submission of a
purchase order for Units and one half after completion of installation of the
Units and completion of any acceptance testing procedures agreed to by the
parties to demonstrate that the Units are working properly or upon terms
acceptable to PHT as negotiated with IBM.
2) 50% of all Gross Revenues related to the use of the Core:Tx(R)
Units within the Kiosks. For this purpose, Gross Revenues shall consist of all
per use or user fees, rentals, license fees, directed advertising revenues,
revenue sharing payments, referral fees, or other revenue, however denominated,
directly related to the use of the Core:Tx(R) Units, if any. This revenue
sharing provision shall not entitle PHT to share revenues related to per use or
user fees, rentals, license fees, directed advertising revenues, revenue sharing
payments, referral fees, or other revenue, however denominated, related to the
Kiosks, but only those directly related to the Core:Tx(R) Units as described
above. STAYHEALTHY shall provide reports of the amounts due to PHT pursuant to
subparagraph (2), together with payment of the amount due, on a quarterly basis
within thirty (30) days of the end of each calendar quarter during the term of
this Agreement.
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STAYHEALTHY will submit a purchase order for Core:Tx(R) Units with at least a
ninety (90) day lead time before delivery. PHT shall submit invoices to
STAYHEALTHY for amounts due pursuant to subparagraph (1) at the address set
forth in the heading of this Agreement.
Payment terms are net thirty (30) days from receipt of the invoice.
PHT shall have the right to audit the books and records of STAYHEALTHY
pertaining to the payment set forth in subparagraph (2) above upon reasonable
notice to STAYHEALTHY. PHT will pay its own expenses for any such audit.
However, if in any audit, PHT determines that material issues exist that result,
resulted or will result in an underpayment of more than ten percent (10%) or
more of the amount actually due for the audited period, STAYHEALTHY will, within
thirty (30) days, reimburse PHT for its out-of-pocket costs incurred in
conducting the audit, in addition to paying to PHT the amount due with interest
at 10% per annum from when it should have been paid. This subsection is intended
as a fair allocation of audit expenses, not as damages or a penalty.
7. STAYHEALTHY OBLIGATIONS
In connection with this Agreement, STAYHEALTHY will provide the following:
A. a driver interface with the Kiosks and all applications within the Kiosks;
B. software to timely and accurately track usage of the Core:Tx(R) Units within
the Kiosks to the extent that the compensation to PHT is based on such usage,
and to timely deliver reports of such usage to PHT; and
C. at its sole cost and expense, sales and marketing support for the Kiosks,
which shall include identification of MotionTrack(TM) on the Kiosks and in
product advertising as approved in advance by PHT. If any advertising or
marketing materials makes any claims about MotionTrack(TM) or the Core:Tx(R)
Units, such advertising or marketing materials shall be submitted to PHT for
approval in advance and said approval shall not be unreasonably withheld or
delayed. All advertising or marketing materials shall properly follow
appropriate trademark usage guidelines and use the appropriate trademark symbols
on MotionTrack(TM) and Core:Tx(R); and where appropriate identify PHT as the
owner of the associated marks.
8. LIABILITY
Each party's liability to the other shall be limited to an amount equal to two
times the total amount of fees paid under this Agreement.
In addition to any liability or obligation of one party to the other that may
exist under any other provision of this Agreement or by statute or otherwise,
each party shall be liable to and will hold harmless, indemnify, and defend the
other from and against any damages, costs, claims or liabilities which the
indemnified party may sustain, as a result of any of the following:
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A. any infringement or misappropriation of any claimed copyright, patent, trade
secret, or other proprietary right of or in programs, software, algorithms,
designs, plans, drawings, or specifications resulting from the use or adoption
of any designs, plans, drawings or specifications;
B. any non-authorized or wrongful disclosure by the indemnifying party or its
employees of Confidential Information;
C. any negligent or wrongful act of the indemnifying party, its employees,
officers, or subcontractors (whether or not approved pursuant to the terms of
this Agreement); and
D. any claim in connection with bodily injury or death to employees of the
indemnifying party.
IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR INCIDENTAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES NOR FOR ANY AMOUNTS FOR LOSS OF INCOME, PROFIT
OR SAVINGS.
9. WARRANTIES
PHT represents and warrants that the MotionTrack(TM) Software and the Core:Tx(R)
Units will, for a period of one year, be free of any defects and conform to the
written specifications, if any, provided to STAYHEALTHY. The sole remedy for a
breach of this warranty shall be repair or replacement of the defective Unit or
Software.
EXCEPT AS SET FORTH HEREINABOVE, PHT MAKES NO OTHER REPRESENTATIONS OR
WARRANTIES, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE MOTIONTRACK(TM)
SOFTWARE AND CORE:TX(R) UNITS INCLUDING, WITHOUT LIMITATION, IMPLIED WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
10. CONFIDENTIAL INFORMATION
In the course of performing under this Agreement, the parties may receive from
each other or from each other's Affiliates data, information, documents, and
other material belonging to, prepared by or for, or concerning their customers,
employees, software and related business information. For purposes of this
Agreement all such data, information, documents, and other material, including
all summaries, extracts, copies, compilations, analyses, interpretations,
presentations, and other materials derived therefrom, shall be called the
"Confidential Information."
Neither party has any obligation with respect to any Confidential Information
which (a) was previously known by such party without obligations of
confidentiality; (b) that party independently develops; (c) is or becomes
publicly available without a breach of this Agreement by either party; or (d) is
disclosed to it by a third person who is not required to maintain its
confidentiality. The party claiming any of the above exceptions has the burden
of proving its applicability.
The parties' obligations with respect to Confidential Information shall survive
for five (5) years after termination of this Agreement.
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11. FORCE MAJEURE
Neither party hereto will be liable for any failure to perform this Agreement in
accordance with its terms if failure arises out of causes beyond the control of
the parties. Such causes may include, but are not limited to, acts of God or the
public enemy, acts of civil or military authority, fires, floods, strikes,
unavailability of energy or communications sources, materials or equipment,
riots, war or national priorities resulting from the foregoing.
12. USE OF STAYHEALTHY/IBM NAME
PHT shall not in the course of performance of this Agreement or thereafter use
or permit the use of STAYHEALTHY's or any Affiliate' names(s), nor the name of
International Business Machines, (IBM) or its Affiliates, in any advertising or
promotional materials prepared by or on behalf of PHT without the prior written
consent of STAYHEALTHY or IBM, as the case may be. Notwithstanding the above,
STAYHEALTHY agrees that PHT may disclose the existence of this Agreement and
identify STAYHEALTHY in a press release provided that STAYHEALTHY approve of the
content of the press release, which approval shall not be unreasonably withheld
or delayed. STAYHEALTHY also agrees to use its best efforts to have IBM consent
to the use of it name in such a press release. PHT may also disclose the
existence of this Agreement in its securities filings as required by law.
STAYHEALTHY shall not in the course of performance of this Agreement or
thereafter use or permit the use of PHT's name in any advertising or promotional
materials prepared by or on behalf of STAYHEALTHY without the prior written
consent of PHT, which will not be unreasonably withheld or delayed.
13. ASSIGNMENT
PHT shall not assign or subcontract all or any part of its rights or obligations
hereunder, without the written consent of STAYHEALTHY. STAYHEALTHY shall not
assign this Agreement to an unaffiliated entity without PHT's written consent.
14. BINDING EFFECT
This Agreement shall inure to the benefit of and bind the respective successors
and assigns of the parties hereto.
15. WAIVER
No delay or omission on the part of any party hereto in exercising any right
hereunder shall operate as a waiver of such right or any other right under this
Agreement.
16. HEADINGS
The headings used herein are for reference only and shall not limit or control
any term or provision of this Agreement or the interpretation or construction
thereof.
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17. GOVERNING LAW AND FORUM
This Agreement shall be governed by and construed under the laws of the State of
California, without reference to its conflict of law principles. Litigation of
disputes under this Agreement shall be conducted in the courts in the County of
Los Angeles, State of California. The Parties hereto consent to the jurisdiction
of any local, state or federal court in which an action is commenced and located
in accordance with the terms of this Section.
18. LEGAL EXPENSES
Should any litigation be commenced between the Parties hereto or their
representatives concerning any provision of this Agreement or the rights and
duties of any person or entity in relation thereto, the prevailing party in such
litigation shall be entitled, in addition to such other relief as may be
granted, to an award of all actual attorneys' fees and costs incurred in such
litigation, without regard to any schedule or rule of court purporting to
restrict such an award, including, without limitation, actual attorneys' fees
(including the reasonable value of in-house counsel services), together with
court costs and litigation expenses reasonably incurred and actually paid.
19. EXHIBITS
All exhibits referred to, or attached to, this Agreement are integral parts of
this Agreement as if fully set forth herein.
20. ENTIRE AGREEMENT
This Agreement constitutes the entire contract between the parties hereto
pertaining to the subject matter hereof and supersedes all prior proposals,
agreements, understandings, negotiations, and discussions, whether written or
oral, of the parties in connection with the subject matter hereof. No change,
amendment, or modification of this Agreement shall be binding unless in writing
and executed by the party to be bound thereby.
21. NOTICES
Notice under this Agreement shall be sent by facsimile, certified mail, return
receipt requested, or Federal Express or other nationally recognized overnight
carrier to the following addresses or to such other addresses as the parties may
from time to time designate, in writing:
To STAYHEALTHY:
StayHealthy, Inc.
Xxxxxxx Xxxxx,
Xxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
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With a copy to:
Xxxxx X. Xxxxxxx, Esq.
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 00
Xxx Xxxxxxx, XX 00000
To PHT:
Chief Executive Officer
Performance Health Technologies, Inc.
000 Xxxxx Xxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
With a copy to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxxxxxx, Xxxxxx & Xxxxxx
000 Xxxxxxx Xxxxxxxxx
0x Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
22. COUNTERPARTS
This Agreement may be executed in counterparts, and as so executed, the
counterparts shall constitute one and the agreement binding on all Parties.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Agreement as of the year and date first written above.
PERFORMANCE HEALTH TECHNOLOGIES, INC. STAYHEALTHY, INC.
BY: /S/ XXXXXX X. XXXXXXXX BY: /S/ XXXX XXXXXXX
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TITLE: Chief Executive Officer TITLE: Chief Executive Officer
DATE: February 26, 2007 DATE: March 2, 2007
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