Exhibit 10.03
SOFTWARE LICENSE AGREEMENT
THIS SOFTWARE LICENSE AGREEMENT (this "Agreement") is made
effective
the 28th day of April, 2001, by and between
Dan Faust, who resides in Duchesne,
Utah, hereinafter referred to as "Faust" or
"Licensor", and Systems Research,
Inc., a Nevada corporation, whose office is
in St. George, Utah, hereinafter
referred to as "Systems Research" or
"Licensee".
WHEREAS, Faust owns certain computer software more particularly
described in Schedule "A" attached hereto
currently using the code name Quick
Access hereinafter referred to as the
"Software"; and,
WHEREAS, Licensor and Licensee agree that Licensor grants the sole
and
exclusive license to the Software with the
code name Quick Access, as is more
fully described in Schedule "A" to
Licensee.
NOW THEREFORE, upon the terms and conditions contained herein,
Licensor
grants to Licensee the full and exclusive
license to the Software as is more
fully described in Schedule "A".
1.
DEFINITIONS.
a.
"Application" shall mean Licensee's development efforts, which
are developed using the Software.
b.
"Confidential Information" shall mean all Source Code and any
materials marked as Confidential Information, but excluding
Object Code or Documentation that does not disclose Source
Code. Confidential Information also does not include
information that:
(1) was in Licensee's possession before receipt from Faust;
(2) is or becomes a matter of public knowledge through no
fault of Licensee;
(3) is rightfully received by Licensee from third party
without a duty of confidentiality;
(4) is disclosed by Faust to a third party without a duty of
confidentiality on the third party;
(5) is independently developed by Licensee;
(6) is disclosed under operation of law; or
(7) is disclosed by Licensee with Faust's prior written
approval.
c.
"Documentation" shall mean written explanatory materials
relating to the Software delivered to licensee and derivative
works based thereon.
d.
"Enhancements" shall mean all improvements, fixes,
modifications, and other enhancements developed by or on
behalf of Licensee that relate to the Software.
e.
"Intellectual Property Rights" shall mean the following rights
that pertain to the Software:
(1) rights in all U.S. and foreign letters patent and
applications for letters patent whether filed or to be
filed;
(2) rights in the trademarks that are enforceable under common
law, state law, federa1 law, or laws of foreign countries;
(3) rights in copyrights and rights in authorship;
(4) rights under the Semiconductor Protection Act or
equivalent domestic or foreign law; and,
(5) rights in trade secrets under common law, state law,
federal law, and the laws of foreign countries.
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f.
"Object Code" shall mean any machine executable code derived
in whole or in part from the Software.
g.
"Source Code" shall mean any human readable code derived in
whole or in part from the Software.
2. TERM; LICENSING FEES.
a.
Term. The term of the license shall commence on the date of
this Agreement and shall terminate three years thereafter.
Licensee shall have an option to purchase the Software upon
expiration of the term of this Agreement. See Option to
Purchase at End of License Term.
b.
Licensing Fees. In consideration for the rights granted under
this Agreement, Licensee shall pay Faust:
(1) an initial
license fee of 4,000,000 shares of the
common stock of Systems Research, Inc. These shares
shall be restricted shares as defined by the
Securities Act of 1933 and shall bear an appropriate
restrictive legend; and
(2) a license
fee equal to ten percent (10%) of all
license fees collected by Licensor for each
non-exclusive license sold, distributed, or otherwise
disposed of, externally by Licensee. The first
licensing fees shall be due on the first day of the
calendar month, or other period specified herein. and
the second
and each subsequent license fee shall be
due on the same day of such subsequent month, or
other specified period, in which such license fee is
due until all fees have been paid. This license fee
shall be paid until a total of $2,000,000 ("Total
Licensee Fee") has been paid to Licensor. In the
event Licensee exercises its option to purchase the
Software at the end of the term of this Agreement
pursuant to paragraph 7, the option to purchase
payment shall reduce the amount payable under this
paragraph by the purchase option amount. If the Total
License Fee has not been paid at the end of the term
of this Agreement and the Licensee elects to exercise
its purchase option pursuant to Section 9
hereinafter, the license fee described herein shall
continue until the Total License Fee (less the
purchase option amount) has been paid Licensee.
(3) Licensee
shall maintain true and accurate records in
accordance with generally accepted accounting
principles to provide the data necessary for the
computation of the licensee fee payable under the
terms of the Agreement.
(4) Faust may,
at his expense and no more frequently than
once each year, engage an independent auditor to
verify license payments. The auditor may take
abstracts from the relevant records of Licensee to
determine compliance with this Agreement. If any such
audit discloses short or incomplete payments by
Licensee exceeding $25,000 during any twelve-month
period, the cost of such audit shall be borne by
Licensee. If any such audits disclose short or
incomplete payments by Licensee for three or more
months in a twelve-month period, Licensee shall be
required to pay Faust a penalty equal to the amount
of all underpayments in that twelve-month period.
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(5) Licensee
shall be solely responsible for any taxes on
license fees paid under this Agreement, including
state and local use, sales, property, and similar
taxes, but excluding taxes calculated solely on
Faust's income.
c.
Place of Payment. All payments called for under this Agreement
shall made to Licensor, or any assignee of Licensor pursuant
to Section 7, at Licensor's address as set forth herein, or at
such other place as may be designated by Licensor, or such
assignee, to Licensee in writing.
3. LICENSOR'S PROTECTION.
a.
Insurance. Licensee shall, at Licensee's sole cost and
expense, maintain insurance in such amounts appropriate for
its size and the
industry in which it operates. The policies
for such insurance shall provide that Licensor shall receive
thirty (30) days notice of any termination, cancellation, or
alteration of the terms of such insurance.
b. Risk
of Loss. The Software shall be stored in a manner
consistent with industry standards to store and safeguard the
Software from theft, damage or loss. This includes maintaining
the necessary backup copies and procedures to insure its
safety.
c.
Marketing. Licensee shall use its best efforts to market the
software and any application developed. All software data
sheets, sales training manuals, demonstration tools, and other
marketing or sales materials for such marketing shall be the
responsibility of Licensee.
d.
Relationship and Agency. This Agreement does not create any
partnership, agency, or other relationship other than that of
licensee and licensor in accordance with the express
provisions of this Agreement.
e.
Development. Licensee shall be solely responsible for an
development, manufacture, reproduction, assembly,
distribution, sales, installation, maintenance, and support of
the Applications, Software, and Documentation.
4.
REPRESENTATIONS AND WARRANTIES OF LICENSOR: DEFENSE OF LICENSED
RIGHTS.
Faust represents and warrants to Licensee that Faust has good
and
indefeasible title to and has all right and interest to and in all
of
the Software licensed to Licensee, and has acquired sufficient
intellectual property rights protecting the Software such that
the
Software may be used without violating or infringing any
patent,
trademark or other intellectual property rights of any third
party.
Faust represen
