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EXHIBIT 10.2
SOFTWARE LICENSE AGREEMENT
This License Agreement (the "Agreement") is entered into and effective
as of November 10, 2000 (the "Effective Date") by and between Natural
Alternatives International, Inc., a Delaware corporation with its principal
place of business at 0000 Xxxxx Xxxxx Xxxxx, Xxx Xxxxxx, Xxxxxxxxxx 00000
("Licensee"), on the one hand, and FitnessAge Incorporated, a Nevada corporation
with its principal place of business at 0000 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xx
Xxxxx, XX 00000 ("Licensor"), on the other.
WHEREAS, Licensor owns and/or controls certain computer programs (the
"Program" as defined below), along with certain related proprietary trade
secrets, trademarks, patents, patent applications and other technological
know-how, relating to the Program, all of which, including, without limitation,
the Program, is collectively known herein as the Licensed Property;
WHEREAS, Licensor and Licensee have previously formed an LLC known as
Custom Nutrition, LLC, which has, inter alia, received a license to and used the
Licensed Property to assist in the exploitation of Licensee's products;
WHEREAS, Licensor is currently indebted to Licensee in an amount in
excess of $750,000, the promissory notes for which became due and payable on
November 10, 2000 (the "Loan Obligation"); and
WHEREAS, Licensor and Licensee have agreed in writing to extend the due
date of the Loan Obligation in exchange for additional securitization thereof,
including, without limitation, this Software License Agreement and a Security
Agreement of even date herewith.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby mutually acknowledged by each of the parties
hereto, it is agreed as follows:
1. License: Licensor hereby grants to Licensee a perpetual, irrevocable,
non-exclusive, royalty-free, worldwide license to use display, modify,
sub-license, commercialize, and otherwise exploit the Licensed Property, subject
to the terms and conditions hereinafter set forth (the "License"), and
specifically excluding the rights licensed by Licensor to Custom Nutrition, LLC
pursuant to the License Agreement dated as of November 11, 1999, by and between
Licensor and Custom Nutrition LLC. It is understood and agreed by the parties
hereto that this License is and shall be an element of the collateral for the
secured Loan which is the subject of the Loan Documents, and, as such, is
subject to the terms and conditions of the revised Security Agreement, entered
into as of the Effective Date.
2. Consideration: As consideration for the performance by Licensor of
all of its obligations and grant of all rights to Licensee herein, Licensee
shall forego the immediate foreclosure of the Loan Obligation, and shall agree
to extend the repayment of the same as set forth in the Second Amendment to Loan
Agreement between Licensor and Licensee dated November 10, 2000 (the "Loan
Agreement").
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3. The Program: The Program shall consist of the modules or components,
shall perform the functions and shall comply with the proposals and
specifications, identified or set forth on Schedule "A" to the Source Code
Escrow Agreement, executed concurrently herewith, a copy of which is annexed
hereto as Exhibit "A" (the "Escrow Agreement"), which modules and/or components
together comprise a system known as the FitnessAge Assessment Application
System.
4. Documentation: The Documentation shall consist of all operator and
user manuals, training materials, guides, listings, specifications, and other
materials for use in conjunction with the Program, as set forth in Schedule "B"
to the Escrow Agreement. Licensor shall deliver to the Escrow Agent, as
specified below, five (5) complete copies of the Documentation. Licensee shall
have the right, as part of the license granted herein, to make as many
additional copies of the Documentation for its own use as it may determine.
5. Source Code: No later than the full execution of this Agreement,
Licensor shall place in escrow a fully commented and documented copy of the
source code form of the Program, a listing thereof and all relevant
Documentation, a listing thereof and Commentary pursuant to the Escrow Agreement
(collectively the "Deposit"). Licensee shall be entitled to receive a copy of
the Deposit under the circumstances set forth in the Escrow Agreement, and may
then use any or all of the deposit for its own benefit. If Licensor corrects any
defects in, or provides any revisions to, the Program under this Agreement,
under any software maintenance agreement, or for any other reason, Licensor
shall simultaneously furnish the Escrow Agent with a corrected or revised copy
of the source code form of the Program, a revised listing thereof, and revised
Documentation.
6. Term: This Agreement shall commence upon the Effective Date and shall
continue until the last expiration of a term of any of the intellectual property
transferred hereunder.
7. New Location: Licensee may, at any time, without prior notice to or
consent of Licensor, transfer or copy the Program to an unlimited number of
locations other than the site of initial installation for use on any other
central processing unit ("CPU") which is owned or controlled by Licensee or by
subsidiaries or other entities owned or controlled by Licensee.
8. Training: The License includes training of Licensee's employees on
the use and operation of the Program, including instruction in any necessary
conversion of Licensee's data for such use.
9. Licensor's Warranties: Licensor hereby warrants and represents to
Licensee as follows:
(a) Ownership. Licensor is the owner of the Program or otherwise
has the right to grant to Licensee the License without violating any rights of
any third party, and there is currently no actual or threatened suit by any such
third party based on an alleged violation of such right by Licensor;
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(b) Intellectual Property Rights. The use, public display, public
performance, reproduction, distribution, or modification of the Program and/or
Documentation does not and will not violate the rights of any third parties,
including, but not limited to, copyrights, trade secrets, trademarks, publicity,
privacy, and patents;
(c) Functionality. The Program, and each module or component and
function thereof, will be capable of operating fully and correctly in the same
manner, with the same hardware and the same operating system as it has been
operated by Custom Nutrition, LLC since the inception of its utilization by
Custom Nutrition, LLC and as it is currently operating, and as it is
contemplated to operate within the six (6) months following the Effective Date.
The Program will be capable of adapting to current hardware and operating
systems as reasonably contemplated by the parties currently utilizing the
Program;
(d) Warranty Period. For a period of one (1) year from the
Effective Date, as specified above (the "Warranty Period") and for the term of
any Program Maintenance Contract, the Program shall (i) be free from defects in
material and workmanship under normal use and remain in good working order, and
(ii) function properly and in conformity with the warranties herein and in
accordance with this Agreement and the uses of the Program contemplated by the
parties hereto, including updates or new releases, and the Documentation shall
completely and accurately reflect the operation of the Program;
(e) Capacity. During the Warranty Period and for the term of any
Program Maintenance Contract, the Program can and shall maintain, use, update,
and otherwise process the number of transactions reasonably required to perform
to the expectations of Licensee and Custom Nutrition, LLC without adversely
affecting its response time or other performance, and shall do so in acceptable
time frames;
(f) Reliability. During the Warranty Period and for the term of
any Program Maintenance Contract, the Program, can maintain the uptime or
reliability standards consistent with current standards in the relevant segment
of the software industry;
(g) Remedies for Breach of Program Warranties. In the event that
the Program does not meet the above warranties, Licensor shall provide at no
charge during the Warranty Period or the term of any Program Maintenance
Contract, the necessary software and services required to attain the levels or
standards set forth in said warranties;
(h) Service and Maintenance. Licensor warrants that each of its
employees or subcontractors assigned to perform any work hereunder, and under
any Program Maintenance Contract, shall have the proper skill, training and
background so as to be able to perform in a competent and professional manner
and that all work will be so performed;
(i) Service Warranty. For the Warranty Period and the term of any
Program Maintenance Contract, Licensor warrants that it shall maintain the
Program in good working order, keep it free from defects in material and
workmanship, and remedy any failure of the Program to perform in accordance with
this Agreement (including the warranties set forth herein), any Exhibits hereto,
or which impairs Licensee's use thereof, or any other malfunction,
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defect or non-conformity in the Program, which shall be provided as follows:
Licensor agrees to respond to any request for service due to a failure,
malfunction, defect or non conformity by telephone response by a qualified and
knowledgeable representative within four (4) hours of receipt of such request
and such representative shall render continuous effort, via telecommunications,
to remedy the failure, malfunction, defect or non-conformity. If such failure,
malfunction, defect or non-conformity cannot be remedied by such means within
twenty-four (24) hours of receipt of such request, Licensor shall immediately
send at least one qualified and knowledgeable representative to Licensee's Site
and said representative(s) will furnish continuous effort to remedy the failure,
malfunction, defect or non-conformity.
10. Program Maintenance:
(a) During the warranty period, and for the term of any Program
Maintenance Contract Licensor shall promptly notify Licensee of any defects or
malfunctions in the Program or Documentation of which it learns from any source.
Licensor shall promptly correct any defects or malfunctions in the Program or
Documentation discovered during such warranty period and the term of any Program
Maintenance Contract and provide Licensee with corrected copies of same, without
additional charge. Licensor's obligation hereunder shall not affect any other
liability which it may have to Licensee.
(b) Licensor shall provide to Licensee, without additional
charge, copies of the Program and Documentation revised to reflect any
enhancements to the Program made by Licensor during the warranty period and the
term of any Program Maintenance Contract. Such enhancements shall include all
modifications to the Program which increase the speed, efficiency or ease of
operation of the Program System, or add additional capabilities to or otherwise
improve the functions of the Program System.
11. Additional Support: During the warranty period and for the term of
any Program Maintenance Contract, Licensor shall provide to Licensee, without
additional charge, all reasonably necessary telephone, email or other written
consultation requested by Licensee in connection with its use and operation of
the Program or any problems therewith.
12. Program Maintenance Contract and Renewal Option: After expiration of
the Warranty Period, if Licensee elects, Licensor shall provide maintenance,
additional support and enhancements in connection with the Program, pursuant to
the terms of a Program Maintenance Contract, the terms of which shall be at
least as favorable to Licensee as any other Program Maintenance Contract in
effect at the time of Licensee's election hereunder, pursuant to paragraph 18
below. Licensor grants to Licensee the option to renew the Program Maintenance
Contract for seven (7) one-year terms after the initial one-year term. In
addition to any rights otherwise granted to Licensee hereunder, as part of the
Program Maintenance Contract, Licensor shall make available to Licensee all
updates and enhancements to the Program. For each update or enhancement,
Licensor warrants and represents that the installation of such update or
enhancement shall not give rise to any additional costs and the installation of
the update or enhancement shall not adversely affect the Program performance as
warranted herein. Licensee shall have the right to refuse to utilize any such
update or enhancement, and such refusal shall not relieve Licensor of its
obligations for support, warranty and maintenance of the Program.
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Any additional services during the Warranty Period or the term of any Program
Maintenance Contract shall be provided upon Licensee's request at Licensor's
standard time and materials rates.
13. Licensee Modifications: Licensee shall have the right (subject to
the rights of Custom Nutrition, LLC to the Program), in its own discretion, to
independently modify and use the Program for its own purposes, through the
services of its own employees or of independent contractors, provided that same
agree not to disclose or distribute any part of the Program to any other person
or entity or otherwise violate Licensor's proprietary rights therein. Licensee
shall be the owner of any such modifications. Such modifications, if approved by
Licensor, shall not affect Licensor's warranty or maintenance obligations
hereunder. Licensor shall not incorporate any such modifications into its
software for distribution to third parties unless it first agrees to pay
Licensee a reasonable royalty, pursuant to mutually agreed upon terms.
14. Indemnity: Licensor, at its own expense, shall indemnify and hold
harmless Licensee, its subsidiaries, affiliates or assignees, and their
directors, officers, employees and agents and defend any action brought against
same with respect to any claim, demand, cause of action, debt or liability,
including attorneys' fees, to the extent that it is based upon a claim (1) that
the Program used hereunder infringes or violates any patents, copyrights, trade
secrets, licenses, or other property rights of any third party, (2) of any other
breach or alleged breach of this Agreement, or (3) relating to the exploitation
of this License. Licensee may, at its own expense, assist in such defense if it
so chooses, provided that, as long as Licensor can demonstrate sufficient
financial resources, Licensor shall control such defense and all negotiations
relative to the settlement of any such claim. Licensee shall promptly provide
Licensor with written notice of any claim which Licensee believes falls within
the scope of this paragraph. In the event that the Program or any portion
thereof is held to constitute an infringement and its use is enjoined, Licensor
shall have the obligation to, at its expense: (i) modify the infringing Program
without impairing in any material respect the functionality or performance
thereof, so that it is non-infringing, (ii) procure for Licensee the right to
continue to use the infringing Program, or (iii) replace said Program with
equally suitable, non-infringing software. These remedies shall be in addition
to, and not exclusive of all other remedies available to Licensee. Licensor
agrees to indemnify Licensee for any liability or expense due to claims for
personal injury or property damage either arising out of the furnishing or
performance of the Program or the services provided hereunder or arising out of
the fault or negligence of Licensor.
15. Confidentiality:
(a) Confidential Information. The terms of this Agreement,
technical and marketing plans or other sensitive business information, including
all materials containing said information, which are supplied by either of the
parties hereto ("Disclosing Party") to the other ("Receiving Party") are the
confidential information ("Confidential Information").
(b) Restrictions on Use. Receiving Party agrees that except as
authorized in a writing signed by Disclosing Party: (i) Receiving Party will
preserve and protect the confidentiality of all Confidential Information; (ii)
Receiving Party will not disclose the
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existence, source, content or substance of the Confidential Information to any
third party, or make copies of Confidential Information; (iii) Receiving Party
will not deliver Confidential Information to any third party, or permit the
Confidential Information to be removed from Receiving Party's premises; (iv)
Receiving Party will not use Confidential Information in any way other than as
provided in this Agreement; (v) Receiving Party will not disclose, use or copy
any third party information or materials received in confidence by Receiving
Party for purposes of work performed under this Agreement; and (vi) Receiving
Party shall require that each of its employees and independent contractors who
work on or have access to the Confidential Information maintain Disclosing
Party's Confidential Information with the same care and security as they would
their own.
(c) Limitations. Information shall not be considered to be
Confidential Information if Receiving Party can demonstrate that it (i) is
already known or otherwise becomes publicly known through no act of Receiving
Party; (ii) is lawfully received from third parties subject to no restriction of
confidentiality; (iii) can be shown by Receiving Party to have been
independently developed by it without use of the Confidential Information; or
(iv) is authorized in a writing signed by Disclosing Party to be disclosed,
copied or used.
(d) Injunctive Relief. Each party acknowledges that any breach of
the provisions of this Paragraph 15 may cause irreparable harm and significant
injury to an extent that may be extremely difficult to ascertain. Accordingly,
each party agrees that the other party will have, in addition to any other
rights or remedies available to it at law or in equity, the right to seek
injunctive relief to enjoin any breach or violation of this Paragraph 15.
16. Licensor's Proprietary Notices: Licensee agrees that any copies of
the Program or Documentation which it makes pursuant to this Agreement shall
bear all copyright, trademark and other proprietary notices included therein by
Licensor and, except as expressly authorized herein, Licensee shall not
distribute same to any third party without Licensor's prior written consent.
Notwithstanding the preceding sentence, Licensee may add its own copyright or
other proprietary notice to any copy of the Program or Documentation which
contains modifications to which Licensee has ownership rights pursuant to this
Agreement.
17. Most Favored Customer: Licensor agrees to treat Licensee as its most
favored customer. Licensor represents that all of the prices, warranties,
benefits and other terms being provided hereunder are equivalent to or better
than the terms being offered by Licensor to its current customers, including,
without limitation, the obligation to promptly provide Licensee with any updates
Licensor generates relating to the Program. If, during the warranty period or
Program Maintenance Contract, Licensor enters into an agreement with any other
customer providing such customer with more favorable terms, then this Agreement
shall be deemed appropriately amended to provide such terms to Licensee.
Licensor shall promptly provide Licensee with any refund or credits thereby
created.
18. Assignment: Licensee may assign this agreement at its sole
discretion. Licensor shall not assign this Agreement without Licensee's prior
written consent, which shall not be unreasonably withheld. An assignee of either
party, if authorized hereunder, shall have all of the rights and obligations of
the assigning party set forth in this Agreement.
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19. Miscellaneous Provisions:
(a) Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto relating to the subject matter hereof. No
modification, amendment, waiver, termination or discharge of this Agreement or
any of the terms or provisions hereof shall be binding upon either party hereto
unless confirmed by a written instrument signed by both parties. No waiver by
either party hereto of any term or provision of this Agreement or of any default
hereunder shall affect either party's respective rights thereafter to enforce
such term or provision or to exercise any right or remedy in the event of any
other default, whether or not similar.
(b) Agency. Licensor is an independent contractor hereunder.
Nothing contained herein shall be construed or interpreted as constituting an
employer/employee, partnership, joint venture, or agency relationship between
the Licensor and Licensee. No third party is intended to be a third party
beneficiary hereof.
(c) Binding Agreement. This Agreement shall be binding on and
inure to the benefit of the respective successors, assigns, licensees and
representatives of each party hereto.
(d) Notice. The respective addresses of the parties hereto for
all purposes of this Agreement are set forth on page 1 hereof, unless and until
notice of a different address is received by the party notified of that
different address. All notices shall be in writing and shall be either served by
certified or registered mail (return receipt requested), by hand delivery, or by
facsimile, in each case with all charges prepaid. Notices shall be deemed
effective when mailed, hand delivered, or faxed, all charges prepaid, except for
notices of change of address. A copy of each notice to Licensee shall be
simultaneously sent to Xxxxxxx Xxxxxxxxx, Esq., Squadron, Ellenoff, Plesent &
Xxxxxxxxx, LLP, 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000, Xxx Xxxxxxx, XX 00000, and
Xxxxx X. Xxxxxx, Esq., Xxxxxx Xxxxxxx LLP, 0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xx
Xxxxx, XX 00000-0000.
(e) Severability. If any provision of this Agreement shall be
held void, invalid, or inoperative, no other provision of this Agreement shall
be affected as a result thereof, and, accordingly, the remaining provisions of
this Agreement shall remain in full force and effect as though no such void,
invalid, or inoperative provision had been contained herein.
(f) Attorney Fees. In the event of any action, suit, or
proceeding arising from or based upon this agreement brought by either party
hereto against the other, the prevailing party shall be entitled to recover from
the other its reasonable attorneys' fees in connection therewith in addition to
the costs of such action, suit, or proceeding.
(g) Governing Law. This Agreement has been entered into in the
State of California and its validity, construction, interpretation and legal
effect shall be governed by the laws of the State of California applicable to
contracts entered into and performed entirely therein. The parties hereto agree
that all legal proceedings relating to the subject matter of this Agreement
shall be maintained in courts sitting within the State of California, and each
party
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consents and agrees that jurisdiction and venue for such proceedings shall lie
exclusively with such courts.
(h) Remedies. The rights and remedies of Licensee set forth in
this Agreement are not exclusive and are in addition to any other rights and
remedies available to it in law or in equity.
IN WITNESS WHEREOF the parties have executed this agreement on the date
first set forth above.
LICENSOR LICENSEE
By: By:
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Xxxxx X. Xxxxxxxx Xxxxx Xxxxx
Its: Vice Chairman Its: CFO and Treasurer
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EXHIBIT "A"
SOURCE CODE ESCROW AGREEMENT
