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Exhibit
10.17
XXXXX INDICATES MATERIAL
THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
LICENSE
AGREEMENT
This LICENSE AGREEMENT (the
“ Agreement ”) is made this 8
th
day of April, 2008 (the
“ Effective Date ”), by and between
Koosharem Corp., a California corporation d/b/a Select Staffing
located at 3820 State Street, Santa Barbara, CA 93105 (“
Select ”) and ClearPoint Resources, Inc., a
Delaware corporation located at 1600 Manor Drive, Suite 110,
Chalfont, PA 18914 (“ CPR ”). CPR and
Select may be referred to herein each as a “
Party ” and collectively as the “
Parties .”
B A C K G R O U N
D
WHEREAS, CPR is a leading
provider of workforce management solutions. CPR’s iLabor
Network technology solution is a web-based portal in which third
party clients can purchase, and third party vendors can sell,
temporary staffing services (the “ Network
”). The Network streamlines and optimizes the complex
processes involved in procuring and managing a contingent
workforce; and
WHEREAS, Select, a leading,
full-service staffing company, desires to (i) obtain a license
to use the Network as a hosted, front-office tool, (ii) supply
qualified temporary staffing personnel to the Network, and
(iii) submit work orders as a client desiring to procure
temporary staffing personnel from the Network, subject to the terms
and conditions set forth herein.
NOW, THEREFORE, in
consideration of the foregoing recitals and the mutual covenants
and promises hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, Select and CPR, intending to be legally bound hereby,
agree as follows:
1. Definitions . In
addition to the capitalized terms otherwise defined herein, the
following terms have the following meanings when used
herein.
(a) “
Affiliate ” means, with respect to any Person,
any other Person directly or indirectly controlling or controlled
by, or under direct or indirect common control with, such Person.
For purposes of this definition, a Person shall be deemed to
control another Person if it owns or controls more than fifty
percent (50%) of the voting equity of the other Person (or
other comparable ownership if the Person is not a
corporation).
(b) “ Change of
Control ” shall mean (i) a sale, lease or
transfer of all or substantially all of Select’s assets, or
(ii) any consolidation, merger, sale of stock, share exchange
or other disposition by Select (or its shareholders), either in one
or a series of transactions, in which the holders of Select’s
voting securities outstanding immediately prior to such
consolidation, merger, sale of stock, share exchange or other
disposition do not in the aggregate hold a majority of the voting
securities of the surviving or resulting entity outstanding
immediately following such consolidation, merger, sale of stock,
share exchange or other disposition.
(c) “
Encumbrance ” or “ Encumber
” shall mean any lien, mortgage, security interest, pledge,
restriction on transferability, option, right of first refusal,
defect of title or other claim, charge or encumbrance of any nature
whatsoever on any property or property interest, including any
restriction on the use, voting, transfer, receipt of income or
other exercise of any attributes of ownership.
(d) “
Event ” shall mean (i) a material breach
of this Agreement by Select, where such material breach remains
uncured for a period of fifteen (15) days following
Select’s receipt of written notice of such breach,
(ii) a failure of Select to make any payment required
hereunder to CPR when due, where such failure to pay remains
uncured for a period of five (5) days following the due date;
provided , however , use of the cure period more than
three (3) times in any rolling twelve (12) month period
shall result in the elimination of the cure period for a period of
six (6) months, (iii) if Select dissolves, liquidates or
winds up its operations, whether voluntarily or involuntarily,
(iv) if Select ceases to function as a going concern or to
conduct operations in the normal course of business, (v) if
Select shall become insolvent, or shall ask its creditors for a
moratorium, or shall file a voluntary petition for bankruptcy or
shall suffer appointment of a temporary or permanent receiver,
trustee or custodian for all or a portion of its assets,
(vi) if Select has a petition or action filed against it under
any bankruptcy or insolvency law which petition or action has not
been dismissed or set aside within sixty (60) days of its
filing, (vii) if Select makes an assignment for the benefit of
its creditors, (viii) upon a Change of Control, or
(ix) the occurrence of a default or breach or an event that,
with the giving of notice and/or the passage of time, would
constitute a default or breach under any other written agreement
between CPR and Select dated as of the date hereof.
(e) “ iLabor
Revenue Fee ” shall mean the net of the amount billed
by Select to the end-user client under Section 3(b) hereof, or
the net of the amount billed by CPR to clients referred by Select
and serviced directly by CPR through the Network, as the case may
be, less the amount paid to the respective Supplier.
(f) “ Law
” means each provision of any currently existing federal,
state, local or foreign, civil and criminal law, statute, law,
ordinance, order, code, rule, regulation or common law, promulgated
or issued by any governmental authority (including, but not limited
to, any environmental law, occupational safety and health laws
and/or the WARN Act), as well as any judgments, decrees, injunction
or agreements issued or entered into by any governmental
authority.
(g) “
Person ” shall mean any individual or natural
person, business trust, corporation, partnership, joint venture,
limited liability company, joint stock company, proprietorship,
association, trust or unincorporated organization or government
agency or political subdivision thereof or any other legal entity
of whatever nature.
(h) “
Territory ” shall mean the continental United
States.
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2. License
.
(a) Grant of License .
Subject to the terms and conditions set forth herein, CPR hereby
grants to Select a non-exclusive, non-transferable right and
license without the right to sublicense (the “
License ”) to use the Network within the
Territory, during the Term (as defined below), in a hosted manner
as a front-office tool. The License shall include a right to all
upgrades and maintenance pertaining to the Network.
(b) Restrictions on
Use . Select shall not (i) permit any unauthorized Persons
to use or have access to the Network or any portion thereof,
whether by timesharing, networking or by any other means,
(ii) create a system, technology or platform similar to the
Network, (iii) translate, decompile, disassemble, or reverse
engineer the Network or its technology or otherwise attempt to
derive the source code of the Network, (iv) assign,
sublicense, lease, Encumber or otherwise transfer use of the
Network or any portion thereof, or (v) remove any copyright,
trademark, patent or other proprietary notices from the Network or
any portion thereof.
(c) Retention of
Rights . CPR exclusively retains and owns all right, title and
interest in and to the Network, any underlying technology and any
and all intellectual property rights therein, notwithstanding any
alleged contribution of Select thereto. All rights not expressly
granted herein are reserved by CPR. Nothing in this Agreement shall
confer to Select any right, title or interest in the Network, any
underlying technology or any intellectual property rights therein.
Select shall not take any action that would infringe upon, dilute
or conflict with CPR’s right and ownership in the
Network.
(d) Export Controls .
Select agrees to comply strictly and fully with all export and
import controls imposed on the Network and underlying technology by
any country or organization of nations within whose jurisdiction
Select operates or does business, including but not limited to the
United States. Select shall not submit the Network or underlying
technology to any government agency for licensing consideration or
other regulatory approval without the prior written consent of
CPR.
3. iLabor Services
.
(a) iLabor Supplier
.
(i) Services . Select
hereby agrees to become a supplier of qualified temporary personnel
(“ Temp(s) ”) to third party clients (a
“ Client ”) through the Network and to
fulfill all agreed-upon orders for Temps accepted and agreed to by
Select through the Network. The terms of any individual project in
which Select supplies Temps to a Client (a “
Project ”) will be outlined on the Network
and/or in a Project acceptance document, and shall be agreed to
separately on a Project-by-Project basis. CPR reserves the right to
cancel, without liability, an order for Temps at any time prior to
placement of the Temps with a Client. CPR is not, and shall not be
deemed to be, the employer of any Temp.
(ii) Termination . If
a Client terminates its engagement with CPR, and Select is
performing services for such Client, then upon notification by CPR
(the “ Notice ”) Select shall immediately
cease performing services for such Client and CPR shall be
responsible to pay Select only for services performed prior to
receipt of the Notice by Select; provided , however ,
if Select opts to continue to provide such services following
receipt of the Notice, then CPR shall not be responsible to pay
Select for such services performed after receipt of the
Notice.
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(iii) Compensation;
Payment Terms; Insurance; Taxes . For services performed in
accordance with the Project requirements, CPR will pay Select for
billable work hours approved by the Client at the agreed-upon
hourly bill rate (the “ Supplier Fee ”).
CPR will pay Select its Supplier Fee within fourteen
(14) business days of receipt of payment from Client. Select
will carry and maintain sufficient workmen’s compensation,
liability and other insurance customary in this industry (and, in
any case, no less than is required by Law) covering all Temps
placed with a Client. Select will be solely responsible for the
payment of all Temp wages, benefits, applicable taxes (including,
but not limited to, social security, federal, state, local or any
other employee payroll taxes) and insurance costs (including
workers’ compensation insurance) arising from Select’s
performance of the services requested by Client. Select shall use
either CPR’s web-based computer program for time reporting or
one comparable and agreeable to by CPR and Select (Select may
utilize its Tymetrics system for time reporting so long as that
system can upload the information in a excel spreadsheet format to
CPR’s system).
(b) iLabor Client
.
(i) Services . CPR
shall permit Select to use the Network to find and select
third-party, temporary personnel vendors (the “
Suppliers ”) to fulfill orders for
Select’s end-user client. Select shall not know the
identification of the bidding Suppliers. CPR shall use commercially
reasonable efforts to provide Select with Temps through the
selected Supplier. All orders for Temps (including Supplier
selection and rate agreement) shall occur through the Network.
Select shall pay the rate that it agrees to in the Network. Select
shall submit all orders in the format reasonably requested by CPR
and orders must be submitted no later than 9:00 p.m. (EST) to be
considered for posting on the following day.
(ii) Fees; Invoices .
Each week, all Supplier submitted timesheets will be provided to
Select for approval, which Select shall approve promptly and in a
timely fashion, but in any event no later than Wednesday (5:00 p.m.
EST) of the week following the week for which the timesheet
applies. Once approved (“ Approved Time
”), CPR shall submit an invoice to Select identifying the
Approved Time, the rate agreed to by Select on the Network and the
services provided. Select shall pay CPR for all Approved Time at
the agreed upon rate within fourteen (14) business days of
receiving an invoice from CPR. Interest on late payments shall
accrue at the rate of three-quarters of a percent (.75%) per month.
Select shall indemnify CPR for all reasonable attorneys’ and
other fees and expenses incurred in collecting unpaid invoices. CPR
shall pay each Supplier following receipt of payment from
Select.
4. Audit .
(a) Each Party shall have the
right, during the Term and for a period of two (2) years
thereafter, upon reasonable notice to the other Party to audit the
other’s books and records and each Party shall make such
books and records relating only to this Agreement and the
obligations hereunder available to the other at such time or times
requested for inspection and audit to permit the
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inspecting Party’s evaluation and
verification of compliance by the non-inspecting Party of its
respective obligations under this Agreement. Except as otherwise
provided herein, each Party will bear its own costs in connection
with such audit.
(b) Such records subject to
audit shall also include those records necessary to evaluate and
verify direct and indirect costs (including overhead allocations),
as they may apply to costs associated with the Agreement. In those
situations where records have been generated from computerized
data, whether mainframe, mini-computer, or PC based computer
systems, each Party agrees to provide the other Party or its
representatives with extracts of data files in computer readable
format on data disks or suitable alternative computer data exchange
formats. Audits may require inspection and photo copying of
selected documents from time-to-time at reasonable times and
places.
(c) If any such audit
undertaken pursuant to the terms of this Agreement discovers
material discrepancies then the Party at fault shall bear the cost
of such audit and shall reimburse the other Party for any
reasonable costs incurred with said audit in addition to the
liabilities it shall bear as a result of its
non-compliance.
5. Compensation
.
(a) Capital Set-up Fee
. In consideration of the License granted herein, Select shall pay
to CPR a non-refundable set-up fee equal to One Million Two Hundred
Thousand U.S. Dollars ($1,200,000) (the “ Set-up
Fee ”) in immediately available funds, payable as
follows: (i) $900,000 on the Effective Date, and
(ii) $300,000 on July 1, 2008.
(b) iLabor Client Fee
Split . For all work orders referred by Select to the Network
pursuant to Section 3(b) hereof, CPR and Select shall split
the monthly iLabor Revenue Fee (in each case, a “ Split
Ratio ”) as follows: (i) for monthly iLabor
Revenue Fees up to XXXXX, then a Split Ratio of XXXXX—XXXXXX,
with XXXXX going to Select and XXXXX going to CPR, and
(ii) for monthly iLabor Revenue Fees equal to or exceeding
XXXXX, then a Split Ratio of XXXXX—XXXXX for the portion
equal to or exceeding XXXXX; with XXXXX going to Select andXXXXX
going to CPR (the foregoing (i) and (ii) collectively
referred to herein as “ Initial Split Ratios
”); provided , however , if Select exercises
any claw back or similar right greater than $6,800,000 in value in
any other written agreement between CPR and Select dated as of the
date hereof, then from that time period forward the Split Ratio
under subsection (i) above only shall be XXXXX—XXXXX
with XXXXX going to Select and XXXXX going to CPR; provided
, further , that upon the earlier of either (w) the
payment of $16,800,000 to CPR under any other written agreement
between CPR and Select dated as of the date hereof, (x) the
payment
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