Exhibit 10.1
LICENSE AGREEMENT
This
LICENSE AGREEMENT (this "Agreement") is entered into and made
effective as of the __6th___ day of ______April_______, 2006, by
and between
SCHIMATIC CASH TRANSACTIONS NETWORK.COM INC. d/b/a SMART CHIP
TECHNOLOGIES, a
Florida corporation ("SCTN"), and PHOENIX TECHNOLOGY HOLDING
INCORPORATED, a TCI
company ("Phoenix").
RECITALS
WHEREAS, SCTN has
developed and is the sole and exclusive owner of certain
technologies related to incentive rewards, including intellectual
property
rights, patents, software, business processes, copyrights,
trademarks, and
services associated with the technologies, (the "Technology");
WHEREAS, SCTN has the power and authority to grant the right,
privilege,
and license to use, reproduce, manufacture, distribute, sell, and
otherwise
commercially exploit the Technology;
WHEREAS, SCTN is not current on filings with the United States
Securities
and Exchange Commission (the "SEC");
WHEREAS, SCTN has an authorized share limit of 200,000,000 shares
and has
over 300,000,000 committed shares;
WHEREAS, SCTN has debt of approximately One Million Dollars
($1,000,000) to
the United States Internal Revenue Service (the "IRS") for unpaid
taxes;
WHEREAS, SCTN has debt of approximately Four Million Five Hundred
Thousand
Dollars ($4,500,000) to Airos Group for development services
rendered to make
the Technology commercially deployable;
WHEREAS, SCTN has debt of approximately Four Million Dollars
($4,000,000)
to secure note holders for monies the note holders have invested in
SCTN;
WHEREAS, SCTN has debt of approximately Five Hundred Thousand
Dollars
($500,000) to SCTN ex-employees for accrued salaries and
expenses;
WHEREAS, SCTN has debt of approximately Two Million Five Hundred
Thousand
Dollars ($2,500,000) for SCTN ex-officers past debts, severance and
other
issues;
WHEREAS, SCTN has debt of approximately One Million Dollars
($1,000,000)
owed to IBM for development of the Kid's Card program which
commercially failed;
WHEREAS, SCTN has debt of approximately Five Hundred Thousand
Dollars
($500,000) to Kruse Landa Maycock & Ricks, LLC for legal
services;
WHEREAS, SCTN has debt of approximately One Million Dollars
($1,000,000)
for other services related to SCTN operations;
WHEREAS, SCTN has experienced significant dilution caused by
its
outstanding debt;
WHEREAS, SCTN has
significant conversion rights caused by its outstanding
debt;
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WHEREAS, SCTN has deployed the Technology;
WHEREAS, SCTN has only received trace revenues for the Technology
until the
signing of this Agreement;
WHEREAS, SCTN is unable to raise significant capital
externally;
WHEREAS, hosting costs for the SCTN system are approximately
Twenty
Thousand Dollars ($20,000) per month;
WHEREAS, development fees for the SCTN system have been
approximately
Twenty Thousand Dollars ($20,000) to Two Hundred Thousand Dollars
($200,000) per
month during the past 12 months;
WHEREAS, SCTN has due diligence issues with potential clients;
WHEREAS, SCTN does not currently have the funds to maintain the
intellectual property escrow;
WHEREAS, SCTN is currently engaged in several lawsuits;
WHEREAS, SCTN has been technically insolvent for over three (3)
years;
WHEREAS, through interest on its debt, Airos Group would likely
have Fifty
One Percent (51%) control of SCTN in 2007;
WHEREAS, SCTN has potential liabilities that are currently unknown
to the
SCTN Board of Directors, including liabilities from IC One and
SCTN;
WHEREAS, SCTN cannot afford to pay for director's liability
insurance;
WHEREAS, Miki Radivojsa, Bernard McHale, and David Simon are
officers of
SCTN;
WHEREAS, Miki Radivojsa, Bernard McHale, and David Simon may have a
direct
or indirect interest in Phoenix or Phoenix licensees including
officer status,
employment status, and shareholder status;
WHEREAS, SCTN has been primarily funded by Bernard McHale, Miki
Radivojsa,
David Simon and Airos Group in the last several years
WHEREAS, SCTN is being primarily funded by Bernard McHale, Miki
Radivojsa,
and Airos Group at the time of entering into this Agreement;
WHEREAS, Phoenix desires to obtain an exclusive license to use,
reproduce,
manufacture, distribute, sell, and otherwise commercially exploit
the
Technology; and
WHEREAS, SCTN agrees to license the Technology to Phoenix, and
Phoenix
agrees to license the Technology from SCTN, on the terms and
conditions listed
below.
NOW,
THEREFORE, in consideration of the premises, and for other good
and
valuable consideration, the receipt and sufficiency of which is
hereby
acknowledged, the Parties hereby agree as follows:
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AGREEMENT
1.
License. The
above recitals are hereby incorporated by reference.
Subject to the terms of this Agreement, SCTN grants to Phoenix an
exclusive
license to use and commercially exploit the Technology. Phoenix
shall have the
right under this Agreement to sub-license the Technology to
third-parties,
subject to the terms of this Agreement.
2.
Obligations of
SCTN. SCTN agrees to perform the following obligations
under the terms of this Agreement:
a.
SCTN will
maintain its corporate status, and pay any and all costs
related to the administration of its governance and business.
b.
SCTN will
provide use and access to Phoenix of all SCTN trademarks,
trade names, and logos to utilize in conjunction with the
license
granted under this Agreement.
c. SCTN will, to the extent
necessary, assist in facilitating any
sub-licensing of the Technology by Phoenix to third-parties.
d.
SCTN will be
responsible for any and all interest accrued on any new
debt incurred under this Agreement, excluding any existing SCTN
debt
assumed by Phoenix under this Agreement.
e.
Upon entering
this Agreement, SCTN will transfer to Phoenix the names
and contact information of any potential customers that SCTN is
currently in negotiations with, or has previously been in
negotiations
with, concerning the licensing of the Technology.
3.
Obligations of
Phoenix. In addition to the fees and other obligations
imposed upon Phoenix under the terms of this Agreement, Phoenix
agrees to
perform the following obligations:
a.
Phoenix will
completely fund its own costs of the use, reproduction,
manufacture, distribution, sales, and any other commercial
exploitation of the Technology.
b.
Upon entering
into this Agreement, Phoenix will assume a certain
portion of the SCTN debt consisting of Airos invoiced debt, SCTN
note
holder debt, SCTN accrued salary debt, as well as any other debt
that
will be mutually agreed to by the Parties in writing.
c.
Phoenix will
waive any debt assumed under this Agreement after
generation and payment of fees to SCTN in excess of Ten Million
Dollars.
4.
Ownership of the
Intellectual Property. Phoenix acknowledges that SCTN
is the owner of the Technology, including all subsequent
enhancements,
alterations, changes and/or modifications to the Technology,
whether made by
SCTN or Phoenix. In order to clearly define ownership in any
development
project, SCTN and Phoenix will agree which changes are owned by
SCTN and which
changes are to be owned by Phoenix .If the parties do not agree
then any
modifications not specifically commissioned and paid for by SCTN
will belong to
Phoenix. . ,..Also, there may be other technologies and products
that have no
relationship to the core SCTN technology and Phoenix will hold and
maintain sole
ownership of these technologies and these products. Except as
prohibited by law,
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Phoenix agrees that it will do nothing inconsistent with such
ownership either
during the term of this Agreement or afterwards. Phoenix
acknowledges that the
Technology is valid under the applicable law and that its use and
commercial
exploitation of the Technology will not create any right, title or
interest in
the Intellectual Property in Phoenix. SCTN acknowledges that
Phoenix will remain
the exclusive licensor of the Technology, so long as Phoenix meets
the
requirements under Section 7 of this Agreement. The Parties agree
to cooperate
and assist one another in complying with any formalities of local
laws, such as
license recordation. In the event that SCTN elects or is forced to
enter into
chapter seven (7) or chapter eleven (11) bankruptcy proceedings,
the ownership
of the Intellectual Property will transfer to Phoenix.
5.
Indemnification
and Limitation on Liability. SCTN and Phoenix agree to
mutually defend, indemnify and hold each other harmless from any
claims from
their respective intellectual property. Intellectual property
