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EXHIBIT
10.19
SOFTWARE LICENSE AGREEMENT
This Software License Agreement ("Agreement") is made and
entered into this 3rd day of November, 2004, (the "Effective Date")
by and between Espial Group Inc., a Canadian corporation with its
principal place of business at 200 Elgin Street, Suite 901, Ottawa,
Ontario, Canada K2P 1L5, on behalf of itself, and its subsidiaries
(hereinafter individually and collectively referred to as
"Espial"), and mPhase, Inc. with its principal place of business at
587 Connecticut Avenue, Norwalk, CT 06854-1711("Licensee"). Espial
and Licensee are each a "Party", and together are "Parties", to
this Agreement.
WHEREAS, Licensee wishes to license certain software and obtain
certain services from Espial under the terms and conditions set
forth below; and
WHEREAS, Espial wishes to license software, the associated
documentation and provide certain services to Licensee under the
terms and conditions set forth below.
NOW THEREFORE, the Parties mutually agree as follows:
1.
DEFINITIONS
"Confidential Information" shall mean the terms and conditions
of this Agreement and any and all information that is disclosed
under this Agreement (i) in oral, written, graphic, machine
recognizable, and/or sample form, being clearly designated, labeled
or marked as confidential or its equivalent, or (ii) obtained by
examination, testing or analysis of any hardware, software or any
component part thereof provided by one Party ("Disclosing Party")
to another Party ("Receiving Party"). Confidential Information that
is disclosed orally shall be identified as confidential at the time
of disclosure and confirmed by the Disclosing Party by submitting a
written document to the Receiving Party within thirty (30) days
after such disclosure. The written document shall contain a summary
of the Confidential Information and shall be labeled or marked as
confidential or its equivalent. "Confidential Information" includes
the Software, business plans, market projections, marketing plans,
price data and similar proprietary information of the parties, as
well as the terms of this Agreement.
"Development Project" shall mean the software development
project undertaken by Licensee employing the Software Development
Kit with the assistance of the Professional Services, if any, to
create a customized version of the Embedded Software to support the
Product.
"Embedded Software" shall mean run-time versions of Espial's
proprietary software and Sublicensed Supplier Software (if any)
more fully described in Exhibit A, licensed to Licensee hereunder
which may, pursuant to this Agreement, be customized pursuant to
the Development Project described herein and distributed as an
embedded program within Licensee's Products, and shall include
documentation and any future versions, improvements, updates,
enhancements, modifications or derivative works which may be
supplied by Espial as part of Espial's Support Services or
Professional Services.
"End User" means a third party licensed to use Licensee's
Product.
"End User Agreement" means a written agreement between the
Licensee and an End User governing the use of Licensee's Product
containing the terms and conditions set forth in Section 3.4
hereto.
"Espial Mark(s)" shall mean the Espial trademark(s) as more
fully described in Exhibit C.
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"Intellectual
Property Rights" shall mean all rights in any invention, discovery,
improvement, utility model, copyright, industrial design or mask
work right, and all rights of whatsoever nature in computer
software and data, Confidential Information, trade secrets or
know-how, and all intangible rights and privileges of a nature
similar to the foregoing, in every case in any part of the world
and whether or not registered, and shall include all rights in any
applications and granted registrations for any of the
foregoing.
"Product(s)" shall mean any and all of Licensee's devices
described in Schedule A that operate on the unique combination of
operating system ("OS"), central processing unit ("CPU that are
specified in Exhibit A and that following modification pursuant to
the Development Project, incorporates a customized version of the
Embedded Software. Any product or follow-on product with different
functionality or which utilizes a different CPU & OS, than
those specified in Exhibit A shall be deemed a new or different
Product.
"Professional Services" shall mean the technical design,
programming and development services provided to Licensee by Espial
or its subcontractors in accordance with the Statement of Work, if
any, for the purpose of customizing the Embedded Software to
operate with the Product.
"Software" shall mean the Software Development Kit and the
Embedded Software.
"Software Development Kit" shall mean the Espial proprietary
software and the Sublicensed Supplier Software described in Exhibit
A and includes any future versions, improvements, Updates,
enhancements, modifications or derivative works which may be
supplied by Espial in the course of providing Professional Services
and/or Support Services.
"Statement of Work" shall mean the mutually
agreed list of services, if any, set forth in Exhibit B as may be
amended by mutual agreement from time to time, or as otherwise
mutually agreed upon by the Parties, that are to be performed by
Espial to customize the Embedded Software to operate with the
Products.
"Sublicensed Supplier Software" means Supplier Software licensed
to Espial under licenses that permit Espial to offer Company
sublicenses in such Supplier Software under the terms of this
Agreement and the additional terms specified in Exhibit D;
"Supplier Software" means all or any part of the software:
(i) for which all right, title and interest (including all
intellectual property rights) are owned by a third party
("Supplier"); and (ii) that in modified or unmodified form is or
may be incorporated into, or executed in association with, Espial's
proprietary software.
"Support Services" shall mean routine telephonic and e-mail
technical support and copies of any Updates that may be released
during the period of the Support Services to be provided by Espial
to Licensee pursuant to Section 4.
"Updates" shall mean error corrections, bug fixes and such
interim releases of the Software as may be officially released by
Espial to its customers receiving support services similar to or
identical to the Support Services.
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2.
PROFESSIONAL
SERVICES
2.1 In the event the parties agree to implement a Statement of
Work, the terms and conditions of this Section 2 shall apply to all
Professional Services provided hereunder.
2.2. Espial will use commercially reasonable efforts to provide
all Professional Services according to the Statement of Work.
2.3. Licensee will make available at its own expense computer
systems and appropriate personnel to the extent necessary for
Espial to perform the Professional Services. Licensee will ensure
that any Licensee computer systems will be fully functional,
accompanied by complete and accurate user documentation and that
Licensee will make technical support available in a timely manner
as is reasonably required. The parties agree that any Statement of
Work delivery date or work requirement will be adjusted for any
delay in performance of the Professional Services that results from
failure of Licensee computer systems to perform, inadequate
documentation, insufficient technical support or failure to make
timely payments under this Agreement and that any costs and
expenses incurred as a result of such delay shall be borne by
Licensee.
2.4. Espial will invoice Licensee for Professional Services as
specified in the Statement of Work.
2.5. Professional Services fees shall be payable by Licensee
upon Licensee's receipt of Espial's invoice. If Licensee's
procedures require that an invoice be submitted against a purchase
order before payment can be made, Licensee will be responsible for
issuing such purchase order, but such procedure shall not affect
Licensee's obligation to pay an invoice in accordance with Section
5.5. Espial's terms and conditions as provided herein shall apply
at all times, notwithstanding subsequent receipt on a purchase
order of Licensee's terms and conditions.
2.6. Licensee will pay or reimburse Espial for all reasonable
expenses incurred to provide the Professional Services, including,
without limitation, expenses related to travel and the acquisition
of any hardware or software systems specific to the Development
Project.
2.7. All Professional Services shall be provided on a
non-exclusive basis.
3. GRANT OF
LICENSE RIGHTS
3.1 Espial hereby grants to Licensee, subject to the terms and
conditions contained herein, including but not limited to the
payment of all associated fees and the terms and conditions
specific to the Sublicensed Supplier Software contained in Exhibit
D hereto: (a) a non-exclusive, non-transferable, limited license
which may be subject to further limitations specified in Schedule A
to have employees use the Software Development Kit for the express
purpose of undertaking the Development Project; and (b) a
non-exclusive, non-transferable, royalty-bearing, worldwide,
limited license to (i) to integrate the Embedded Software into the
Products; (ii) to reproduce the Embedded Software as integrated
into the Products, and (iii) to distribute the Embedded Software as
integrated into the Products solely to End Users who are subject to
an End User Agreement.
3.2. Licensee agrees that it will conspicuously display the
Espial Mark in the form attached hereto as Exhibit C on each
Product in one of the following formats: (i) silk-screened or
affixed as a sticker on the Product on the same side of the Product
as the Product's main screen display; or (ii) as a screen shot
displayed on the Product's screen display during boot. In either
case, the minimum dimensions of the Espial Mark as displayed in or
on the Product will be 10.1mm wide x 4.2mm high. Licensee may
display
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the Espial Mark in red and
black, white or black, as may be reasonably deemed appropriate in
light of the background colors.
3.3. Espial hereby grants to Licensee a nonexclusive,
nontransferable limited license to use, reproduce and display the
Espial Mark solely in accordance with Section 3.1(b) and 3.2 above
and in connection with the distribution, advertising, marketing and
promotion of Licensee's Products incorporating the Embedded
Software, provided that appropriate trademark notices are included
and the use conforms to Espial's guidelines regarding the use of
trademarks, which will be provided at Licensee's request. Licensee
agrees that Espial is the sole and exclusive owner of the Espial
Mark and all goodwill associated therewith. Except as expressly
provided herein, Licensee is granted no right, title or license to,
or interest in, any Espial Marks. Licensee agrees not to: (i)
challenge Espial's ownership or use of the Espial Marks; (ii)
attempt to register any of the Espial Marks, or any mark or logo
substantially similar thereto; or (iii) incorporate any Espial Mark
into Licensee's own trademarks, product names, services marks,
company names, or domain names.
3.4. End User Agreements shall include the following terms and
conditions:
3.4.1 Prohibition against distribution and copying.
3.4.2 Prohibition against modifications or derivative works.
3.4.3 Prohibition against decompiling, reverse engineering,
disassembling, or otherwise reducing the software to a
human-perceivable form.
3.4.4 Provision indicating ownership of software by Licensee and
its suppliers.
3.4.5 Disclaimer of all applicable statutory warranties, to the
full extent allowed by law.
3.4.6 Limitation of liability not to exceed price of Licensee
Product and provision that sole remedy shall be a right of return
and refund, if any, from Licensee.
3.4.7 Disclaimer of indirect, special, incidental, punitive or
consequential damages.
4.
SUPPORT
SERVICES
4.1. Support Services are for a one-year term and renew
annually. The support fee for each of the first two years of the
Term is specified in Exhibit A. Licensee may renew Support Services
in subsequent years paying the then applicable Support Fee. Espial
shall not be obligated to renew Support Services if Licensee has
discontinued Support Services in any year. Annual Support shall
renew automatically at the then-current fees and policies unless
Licensee notifies Espial at least sixty (60) days prior to the
expiration of an annual support term of its desire to cancel
Support Services for the following year.
4.2. Espial reserves the right to discontinue the Support
Services should Espial, in its sole discretion, determine that
continued support for any Software is no longer economically
practicable and will give Customer at least six (6) months prior
written notice of any such discontinuance of Support Services and
will refund any unused Support Services fees Licensee may have
prepaid with respect to the affected Software. Espial reserves the
right to suspend performance of the Support Services if Customer
fails to pay any amount that is payable to Espial under the
Agreement within thirty (30) days after such amount becomes
due.
5. LICENSE
FEES AND PAYMENT TERMS
5.1. The fees and other charges applicable to the Software
and/or any services provided by Espial are set out in Exhibit
A.
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5.2. A per copy royalty is
payable for each copy of Embedded Software that is to be embedded
in Product. The per copy royalty fee is to be purchased in the
block quantities specified in Schedule A prior to the Embedded
Software being embedded in Product. The block quantities shall be
purchased quarterly based on Licensee's projected requirements. In
the event that additional requirements are later identified,
additional block quantities may be purchased during the
quarter.
5.3. All prepaid royalty fees are non-recourse nonrefundable
regardless of whether or not the minimum number of copies to which
such prepaid royalty fee relates is actually distributed. Prepaid
royalty fees are treated as a credit against royalties otherwise
payable and therefore upon committing to a specific prepaid
roya
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