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EXHIBIT 10.24
EXCLUSIVE SOFTWARE LICENSING AGREEMENT
This Exclusive Software Licensing Agreement (the "Agreement") made as of
the 30th day of June, 1997 is by and between Therapeutic Systems Research
Laboratories "("TSRL"), a Michigan corporation, (the "Licensor") with its
principal place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, and Simulations Plus, Inc., a California Corporation, with its principal
place of business at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, (the "Licensee").
WITNESSETH
WHEREAS, subject only to those exceptions disclosed in this Agreement,
Licensor owns all right, title, and interest in and to certain computer software
based technologies (the "Software Technology"), and certain biological databases
(the "Databases") the functional specifications for which are set forth in
Exhibit A attached hereto;
WHEREAS, Licensor desires to license the Software Technology and
Databases exclusively to Licensee, and Licensee desires to acquire a license to
the Software Technology and Databases, in accordance with the terms and
conditions of this Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Licensor and Licensee, intended to
be legally bound, hereby agree as follows:
SECTION 1.
DEFINITIONS
SOFTWARE TECHNOLOGY. "Software Technology" means the computer
program for gastrointestinal tract absorption prediction referred to as "Gastro"
(as defined in Exhibit A) licensed by Simulations Plus, Inc. and includes: (i)
source code form of the computer Software "Gastro" in all forms, including
machine-readable, visually-perceptible or otherwise; (ii) all associated
documentation, manuals and other printed or visually-perceptible materials
describing the use or design of the Software Technology; (iii) any revisions or
updates provided by Licensor to Licensee pursuant to the terms of this
Agreement; and (iv) any additional computer programs as the parties may from
time to time designate in writing. Modifications, enhancements and/or any
software, technology or other programs derived from the Software Technology for
the purpose of gastrointestinal tract absorption prediction shall be jointly
owned by the Licensee and Licensor following termination as discussed in
Sections 6 and 19 herein.
DATABASES. "Databases" means the experimentally derived
Effective Permeabilities (Peff), determined for a set of proprietary and
non-proprietary drugs (as defined in Exhibit A) by performing plug flow and
mixing tank drug absorption experiments on the following species: human, rat,
dog, and rabbit.
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ACCEPTANCE DATE. "Acceptance Date" means the date upon which the
Licensor receives from the Licensee the Acceptance Notice pursuant to Section 16
and the License Fee pursuant to Section 10.1.
SECTION 2.
CONVEYANCE OF RIGHTS
2.1 Subject to the following terms and conditions, Licensor,
effective as of the Acceptance Date, grants to Licensee a nontransferable,
exclusive license to use the Software Technology and Databases on any and all of
Licensee's computer systems, whether owned, leased, rented or otherwise under
the control of Licensee. The term "use" shall mean the right to copy or utilize
all or any portion of the Software Technology and Databases.
2.2 Licensee shall have the right to adapt the Software
Technology and Databases, in machine-readable form, for its own use and merge it
into other program material to form a composite work. Licensee shall have the
right to modify the Software Technology after the Acceptance Date and subject to
the terms and conditions set forth in Section 6, infra. Upon termination or
discontinuance of the license as discussed in Section 19, infra, Licensee shall
completely remove the Software Technology and Databases from its computer
systems and shall discontinue use of the Software Technology and Databases. Upon
any termination of the license grant under this Agreement, Licensee shall return
to Licensor (or, at Licensor's option, destroy and certify in writing to
Licensor that it has destroyed) the original and all copies of the Software
Technology and Databases. Following the Acceptance Date and thereafter for so
long as this Agreement remains in effect, Licensor shall work exclusively with
Licensee to develop absorption prediction software.
2.3 Licensee shall have the right, after the Acceptance
Date, to copy, in whole or in part, the Software Technology and Databases and
shall be permitted to make as many copies of the Software Technology and
Databases as it deems necessary. The original and any copies of the Software
Technology and Databases, in whole or in part, shall at all times be the joint
property of the Licensee and Licensor together. Each copy of the Software
Technology shall so state in the following language:
This copy of the Gastro program is
the property of Simulations Plus
Inc. and TSRL and is protected
under the copyright, trade secret
and confidentiality laws of the
United States and Canada.
Licensee shall keep a record of each copy made, where such copy
is located and in whose custody it is.
SECTION 3.
DELIVERY OF PHYSICAL OBJECTS
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Licensor, on or before July 31, 1997, shall deliver to Licensee
(1) a master copy of the Software Technology in source code and executable form
and Databases in machine readable form (spreadsheet or database), which shall be
in a form suitable for copying; and (2) all system and user documentation
pertaining to the Software Technology and Databases, including design or
development specifications, technical papers, presentations, error reports, and
related correspondence and memoranda.
SECTION 4.
REPRESENTATIONS AND WARRANTIES OF LICENSOR
4.1 Licensor represents and warrants to Licensee that it is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Michigan, and it has the corporate power and is authorized
under its Articles of Incorporation and its Bylaws to carry on its business as
now conducted;
4.2 Licensor represents and warrants to Licensee that it has
performed all corporate actions and received all corporate authorizations
necessary to execute and deliver this Agreement and to perform its obligations
hereunder;
4.3 Licensor represents and warrants to Licensee that the
execution of this Agreement will not result in any violation or default of or
conflict with: (i) Licensor's Articles of Incorporation or Bylaws; (ii) the
provisions of any other agreement to which it is a party or to which it is
bound; or (iii) any law, judgment, or regulation of any governmental authority;
4.4 Licensor represents and warrants to Licensee that there
are no persons who are entitled to any notice of the transaction contemplated
hereunder or whose consent is required for the consummation of the transaction
contemplated hereunder;
4.5 Licensor represents and warrants to the Licensee that
Licensee shall receive, pursuant to this Agreement, as of the effective date of
this Agreement, an exclusive license in the Software Technology and Databases;
4.6 Licensor represents and warrants to Licensee that, to
Licensor's knowledge (i) the Software Technology and Databases do not infringe
any patent, copyright, or trade secret of any third party; (ii) the Software
Technology and Databases are fully eligible for protection under applicable
copyright law and have not been forfeited to the public domain (except for the
databases of effective permeability that were developed by government funding
mechanisms and are considered to be public information); and (iii) the source
code and system specifications for the Software Technology have been maintained
in confidence;
4.7 Licensor represents and warrants to Licensee that there
are no agreements or arrangements in effect with respect to the marketing,
distribution, licensing or promotion of the Software Technology and Databases by
any independent salesperson, distributor or other remarketer or sales
organization which would interfere with the execution of this Agreement;
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4.8 Licensor represents and warrants to Licensee that it has
not granted any rights in the Software Technology and Databases to third parties
which rights would interfere with Licensee's exclusive license to the Software
Technology and Databases pursuant to this Agreement.
SECTION 5.
REPRESENTATIONS AND WARRANTIES OF LICENSEE
5.1 Licensee represents and warrants to Licensor that it is
a corporation duly organized, validly existing and in good standing under the
laws of the State of California, and it has the corporate power and is
authorized under its Articles of Incorporation and its Bylaws to carry on its
business as now conducted;
5.2 Licensee represents and warrants to Licensor that it has
performed all corporate actions and received all corporate authorizations
necessary to execute and deliver this Agreement and to perform its obligations
hereunder;
5.3 Licensee represents and warrants to Licensor that the
execution of this Agreement will not result in any violation or default of or
conflict with: (i) Licensee's Articles of Incorporation or Bylaws; (ii) the
provisions of any other agreement to which it is a party or to which it is
bound; or (iii) any law, judgment, or regulation of any governmental authority;
and
5.4 Licensee represents and warrants to Licensor that there
are no persons who are entitled to any notice of the transaction contemplated
hereunder or whose consent is required for the consummation of the transaction
contemplated hereunder.
SECTION 6.
OWNERSHIP OF MODIFICATIONS TO THE SOFTWARE TECHNOLOGY
After the Acceptance Date, Licensee may modify, enhance and
otherwise change the Software Technology without the prior written consent of
Licensor. Licensee agrees that a modification or enhancement of the Software
Technology developed by Licensee, with or without the advice or support of
Licensor, whether or not developed in conjunction with Licensor shall jointly be
the property of Licensee and Licensor who, subject to the provisions of Sections
16 and 19, shall thereafter own all right, title and interest to any patents,
inventions, discoveries, applications or processes, software and computer
programs devised, planned, applied, created, discovered or invented for the
purposes of gastrointestinal tract absorption prediction, relating in any way to
the Software Technology. This Section shall survive termination of this
Agreement.
SECTION 7.
WARRANTY
7.1 Licensor represents and warrants to Licensee that the
Software Technology
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and Databases provided by Licensor to Licensee conform in all material respects
to the functional specifications set forth in Exhibit A.
7.2 Among the remedies available to Licensee at law or in
equity for breach of the foregoing warranties, Licensee can require Licensor to
correct any material nonconformance to such specifications within ten (10) days
of Licensor receiving notice from Licensee. Licensor shall not be liable to
Licensee for any direct, incidental, consequential or other damages and expenses
suffered by Licensee as a result of any breach of this Warranty by Licensor.
7.3 Except as expressly provided in Section 13 of this
Agreement, Licensor shall not be responsible to Licensee for, or have any duty
to conduct or perform, any training or instruction; pre-sale or post-sale
marketing support; any licensing, sublicensing, leasing, or distribution; or any
modification, correction, updating, enhancement or technical support of the
Software Technology and Databases.
7.4 Licensor shall have no obligation to make repairs or
replacements to the Software Technology or Databases except as provided in
Section 7.2., and Section 13.2
SECTION 8.
CONFIDENTIALITY
8.1 Each of Licensor and Licensee shall hold in confidence
and not at any time disclose (except on a confidential basis to their employees
who need to know and who have signed a confidentiality agreement) all
Proprietary Information received from the other party in the same manner and to
the same extent as it holds in confidence its own Proprietary Information, and
shall not use any such Proprietary Information except for the purposes
contemplated by this Agreement. As used in this Agreement, "Proprietary
Information" shall mean all confidential and proprietary information, including
but without limitation, components, drawings, data, plans, programs,
specifications, techniques, processes, algorithms, inventions or other
information or material owned, possessed or used by either Licensor or Licensee
which is at any time so designated by such party in writing, whether by letter
or by the use of a proprietary stamp or legend, prior to the time any such
Proprietary Information is disclosed to the other party. In addition,
information which is orally disclosed to the other party shall constitute
Proprietary Information if identified as such at such time and if within ten
(10) days after such disclosure the disclosing party delivers to the receiving
party a written document describing such Proprietary Information and referencing
the place and date of such oral disclosure and the name of the employees of the
party to whom such disclosure was made.
8.2 Licensee shall take all reasonable steps to safeguard
the Software Technology and Databases so as to insure that no unauthorized
person shall have access to them, and that no persons authorized to have access
shall make any unauthorized copy. Licensee shall promptly report to Licensor any
unauthorized disclosure or any use of the Software Technology and Databases of
which it becomes aware and shall take such further steps as reasonably may be
requested by Licensor to prevent unauthorized use thereof.
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8.3 Notwithstanding the obligations herein, the obligations
herein shall not be applicable to information which: (i) was in the possession
of the receiving party free of any obligation of confidence or was in the public
domain at the time the furnishing party communicated it to the receiving party,
through no fault of the receiving party; (ii) was rightfully communicated to the
receiving party free of any obligation of confidence or entered the public
domain subsequent to the time the furnishing party communicated it to the
receiving party, through no fault of the receiving party; (iii) was developed by
employees or agents of the receiving party independently and without knowledge
of, or access to, any information which the furnishing party has disclosed in
confidence to the receiving party or to any third party, provided that the
receiving party shall have the burden of so establishing; (iv) is released from
confidential treatment by written consent of the disclosing party; (v) is
disclosed to the receiving party by a third party with the legal right to do so;
or (vi) is required to be disclosed pursuant to any legal proceeding.
SECTION 9.
ASSIGNMENT
Neither this Agreement nor any rights or licenses granted
hereunder may be assigned or delegated without the written consent of Licensor
and Licensee. This Agreement further provides that any assignee or transferee of
rights or obligations under this Agreement must agree in writing to be bound by
all of the terms of this Agreement and any incidental agreements entered into by
the parties in furtherance of this Agreement. The Agreement shall inure to the
benefit of and be binding upon any permitted successors or assigned of the
parties.
SECTION 10.
PAYMENT
10.1 In consideration of the transfer of complete rights to
the Software Technology and Databases granted pursuant to this Agreement,
Licensee shall pay to Licensor a license fee (the "License Fee") of $75,000.00,
payable in full on or before September 30, 1997. (The failure of Licensee to pay
the License Fee in full on or before that date shall, for all purposes, be
deemed a rejection by the Licensee of the Software Technology and Databases
under Section 16 and a termination of this Agreement under Section 19.
10.2 Additionally, Licensee shall pay to Licensor a royalty
(the "Royalty"), equal to twenty percent (20%) of the net revenues received by
the Licensee (e.g., gross revenues less returns, discounts and allowances,
determined in accordance with generally accepted accounting principles), from
the licensing, sale or other distribution of the Software Technology or the
Databases. For the period beginning on the date of this Agreement and ending on
August 31, 1999, the Royalty will be payable on the basis of actual net revenues
and will not be subject to any minimum payment. If this Agreement continues in
effect as of September 1, 1999 or as of any September 1st thereafter, then, for
the 12-month period beginning on each such September 1st, the Royalty will be
equal to 20% of the actual net revenues received by the Licensee during such
12-month period but in no event less than $50,000 per year. The Royalty will be
computed on a quarterly basis, with the Royalty for each quarter payable in full
not later than 45 days following the
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close of that quarter. If, as of the last quarter of any 12-month period to
which the $50,000 minimum applies, the cumulative Royalties paid with respect to
that 12-month period are less than $50,000, then the payment for the last
quarter of that 12-month period shall include the amount required in order to
satisfy the minimum Royalty for such 12-month period. The Licensee shall include
with each payment of the Royalty a detailed accounting of the licenses, sales
and other distributors of the Software Technology and Databases during the
calendar quarter for which that payment is being made, identifying the
licensee/purchasers of the Software Technology and Databases and the amounts
paid by such licensees/purchasers. Any installment of the Royalty not paid on or
before its due date will bear interest at the prevailing prime rate (as reported
in the Wall Street Journal) from the due date to the date of payment.
SECTION 11.
PAYMENT: TAXES
All license fee and royalty amounts payable pursuant to this
Agreement are exclusive of all federal, state, local and municipal or other
excise, sales, use, property or similar taxes and fees (but not any tax measured
by income of the Licensor), now in force or enacted in the future, and all such
taxes and fees shall be paid by Licensee. Licensee shall obtain and provide
Licensor with any certificate of exemption or similar document required to
exempt any transaction under this Agreement from sales tax, use tax or other tax
liability.
SECTION 12.
RECORDS AND AUDIT
Licensee shall maintain complete and accurate records relating
to the net revenues received by Licensee for the Software Technology and
Databases. Such records shall include information sufficient to determine the
royalties due to Licensor. Licensee agrees to allow Licensor's licensed
certified accountants to audit Licensee's records pertaining to the Software
Technology and Databases and verify the accuracy of the royalties due to
Licensor. Any such audit shall be permitted by Licensee within twenty (20) days
of Licensee's receipt of Licensor's written request to audit. Such audit shall
be conducted during normal business hours at a time mutually agreed upon by
Licensee and Licensor. Licensee's accounting information shall be kept
confidential by the auditors, and Licensee may require that Licensor's
accountants enter into a written confidentiality agreement reasonably acceptable
to Licensee. Such audits will not exceed one (1) per twelve (12) month period.
In the event that Licensee does not agree with the results of the audit
performed by Licensor's licensed certified accountant, then Licensor and
Licensee will mutually choose an independent third party licensed certified
accountant who will audit Licensee's records relating to the net revenues
received by Licensee. The determination of that third party certified accountant
shall be conclusive and binding upon the Licensor and the Licensee. If it is
determined that there was no underpayment by the Licensee of the Royalty for the
period subject to the audit, the Licensor shall bear the entire expense of its
certified accountant and, if applicable, the Licensee's certified accountant and
the third party certified accountant. If it is determined that there was an
underpayment of the Royalty for the period subject to the audit but that the
underpayment was equal to or less than five percent (5%) of the total Royalty
which should have
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been paid for such period, then each party shall be responsible for the cost of
its own certified accountant and the cost of the third party certified
accountant shall be borne in equal shares by the Licensor and the Licensee. If
it is determined that there was an underpayment of the Royalty for the period
subject to the audit and if such underpayment was more than five percent (5%) of
the total Royalty which should have been paid for such period, then the Licensee
shall be responsible for the cost of its certified accountant, the Licensor's
certified accountant, and, if applicable, the third party certified accountant.
SECTION 13.
DELIVERY, INSTALLATION AND SUPPORT
13.1 TECHNICAL SUPPORT. Licensor will deliver and provide
installation instructions for the Software Technology and Databases with the
program documentation at a time mutually agreed upon by the parties. Licensor
will provide technical support to Licensee relating to the development of the
Software Technology and Databases on the following basis: Licensor will provide
a maximum of fifteen (15) hours of non-compensated technical (non-programming)
support per month, including support in developing representative customer
databases, for as long as this Agreement is in effect. Additional technical
support provided by Licensor to Licensee will be mutually agreed upon by the
parties and Licensee will compensate Licensor for any technical support provided
to Licensee in excess of fifteen hours per month. Licensee may carry over unused
technical support time to another month upon mutual agreement with Licensor. The
amount of compensation to be paid by Licensee to Licensor for technical support
will be at the normal rate charged to Licensor's other clients during the
previous twelve months.
13.2 LICENSOR MAINTENANCE SUPPORT. Licensor agrees to provide
maintenance support for the Software Technology and Databases. All revisions,
updates, maintenance and support of the Software Technology and Databases shall
be provided to Licensee when such products or services are available.
13.3 LICENSEE MAINTENANCE SUPPORT. Licensee agrees to provide
maintenance support for the Software Technology. Licensee agrees to provide
programming, project management, debugging, and other related services to
Licensor when such products or services are available.
13.4 MARKETING AND CONSULTING SERVICES. (a) Licensor will
provide reasonable assistance at mutually agreeable times and places in creating
worldwide visibility at national and international symposia and one on one
visibility with leaders within major pharmaceutical companies. Licensor will
provide scientific after-market support, consulting and other related services
to Licensee at mutually agreeable times.
(b) Licensee agrees to provide advertising and distribution
for the Software Technology. Licensee agrees to perform field research to assess
customer acceptance and future demand.
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13.5 EXPENSE REIMBURSEMENT. Licensee will reimburse Licensor
for all out-of-pocket expenses reasonably incurred by the Licensor and its
personnel, and approved in advance by Licensee, in providing the technical
support, maintenance support and marketing support and consulting services
described in Section 13.1, 13.2, and 13.4. Such reimbursement shall be in
addition to the specified compensation in those sections for services rendered.
SECTION 14.
RIGHTS TO ABSORPTION DATABASES
14.1 Following the Acceptance Date and thereafter for so long
as this Agreement remains in effect, Licensee shall have unlimited access to the
Databases developed by Licensor and ▇▇. ▇▇▇▇▇▇. Licensee and Licensor will have
the right to further develop the Databases, with Licensee compensating Licensor
at a rate to be mutually agreed upon by the parties for any further development
by Licensor.
14.2 Licensee shall have unlimited access to data and
information from the Databases which is in the public domain or otherwise
discoverable under the Freedom of Information Act or any similar provision of
any Federal or state law, statute or regulation. This Section shall survive
termination of this Agreement.
14.3 Following the Acceptance Date and thereafter for so long
as this Agreement remains in effect, Licensee shall have unlimited access to
information from the Databases which is proprietary to Licensor and Licensor's
right to the Databases is limited to use for internal purposes only, including
in conjunction with Licensor's client-related projects, and shall not be
licensed, transferred, or otherwise conveyed to any other party.
SECTION 15.
RISK OF LOSS
If the Software Technology and Databases or any documentation
relating to the Software Technology and Databases is lost or damaged during
shipment, Licensor shall replace that which is lost or damaged, together with
necessary program storage media at no additional charge, to Licensee. If the
Software Technology and Databases is lost or damaged while in possession of
Licensee, Licensor will replace it and the Licensee will reimburse the Licensor
for all costs incurred by Licensor in providing that replacement.
SECTION 16.
INSTALLATION AND ACCEPTANCE
Licensor, on or before July 31, 1997, shall deliver to the
Licensee the Software Technology, Databases and all related documentation and
shall oversee the installation of the same onto the Licensee's computer system
for purposes of testing. The Licensee shall thereupon
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have the right to test the Software Technology and the Databases from the period
of that installation through September 30, 1997 to determine, in the discretion
of the Licensee, if the Software Technology and the Databases will satisfy the
Licensee's intended uses and expectations. The Licensor, at no cost to the
Licensee, will provide timely responses to questions raised by the Licensee
during this period and, if mutually agreed by the Licensor and Licensee, the
Licensor will make modifications to the Software Technology and the Databases to
conform to the Licensee's uses and expectations. If, during such period, the
Licensee determines that the Software Technology and the Databases are
satisfactory for its intended uses and expectations, then the Licensee shall
deliver a written notice to the Licensor ("the Acceptance Notice") on or before
September 30, 1997 and include with that Acceptance Notice a check for the
License Fee as required in Section 10.1. If the Licensee delivers the Acceptance
Notice and the check for the License Fee on or before such date, then this
Agreement shall remain in effect, the Licensee may retain the copies of the
Software Technology and the Databases delivered by the Licensor and the Licensor
and the Licensee shall proceed with this Agreement in accordance with its terms.
If the Licensee does not deliver such Acceptance Notice and such check for the
License Fee by such date, then this Agreement shall automatically terminate, the
Licensee shall immediately at its expense return to the Licensor the Software
Technology and the Databases (including all copies or extracts thereof made by
Licensee during the period of possession) and upon such return, except for the
obligations of confidentiality contained in Section 8, all rights and
obligations of the Licensor and the Licensee under this Agreement shall be null,
void, and of no further effect. The Licensee expressly acknowledges that its
rights to use, copy, adapt, modify, enhance or otherwise exploit the Software
Technology and the Databases shall not arise and become effective unless and
until the Licensee delivers the Acceptance Notice and the check for the License
Fee on or before the date specified above.
SECTION 17.
INJUNCTIVE RELIEF
Because unauthorized use of the Software Technology and
Databases or dissemination of information regarding the Software Technology and
Databases may substantially diminish the value of such materials and irreparably
harm the parties, if either party is threatened with disclosure of the
information covered by this Agreement or if either party breaches this
Agreement, the potentially harmed or actually harmed party shall be entitled to
equitable relief (including, but not limited to, injunctive relief without the
need to post a bond therefor), in addition to other remedies afforded by the
law.
SECTION 18.
ASSIGNMENT
Except as hereinafter provided, neither Licensor nor Licensee
shall have the right to assign this Agreement without the prior written consent
of the other party hereto, which consent shall not be unreasonably withheld.
Each party acknowledges that consent to an assignment may be withheld and shall
be considered reasonable if, as a result of such assignment, a third party who
or which is a competitor of the non-assigning party will be the assignee or an
affiliate of the
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assignee. Each party acknowledges that the prohibition against assignments in
this Section will apply not only to direct sales or assignments but also to
indirect sales or assignments by reason of a merger of Licensor or Licensee into
or with any other entity or a sale of substantially all of the assets or
purchases a majority interest in the voting stock or otherwise assumes the
business of the Licensor or Licensee. Any purported assignment not in accordance
with this Section 18 shall be void and not merely voidable. When assigned as
permitted herein, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective permitted successors and assigns
of the parties hereto.
SECTION 19.
TERMINATION
19.1 This Agreement shall terminate as follows:
19.1.1 This Agreement shall automatically terminate as of September 30,
1997 unless, on or prior to that date, the Licensee delivers to the Licensor the
Acceptance Notice and the check for the License Fee as required in Section 16.1.
19.1.2 The Licensee reserves the right to terminate this Agreement at
any time upon written notice delivered to the Licensor, with such termination to
be effective on the fifth business day following the date of delivery of such
notice (or such later date as may be specified by the Licensee in such notice).
19.1.3 If the Licensee breaches its obligation to pay any Royalty or
other amount due to the Licensor under this Agreement on or before its due date
and fails to remedy such breach within ten (10) days after written demand by the
Licensor for payment, then the Licensor shall have the right, by delivery of
written notice to the Licensee following the expiration of that 10-day period,
to terminate this Agreement, effective immediately upon the date of delivery of
such notice of termination. Acceptance of payment of such amount by Licensor
prior to delivery of such notice shall constitute remedy of such breach.
19.1.4 If either party breaches any material obligation under this
Agreement (other than an obligation which is addressed in Section 19.1.3) and
fails to remedy such breach within thirty (30) days after their written notice
by the non-breaching party demanding such remedial action, then the
non-breaching party shall have the right, by delivery of written notice at any
time on or after the expiration of such 30-day period, to terminate this
Agreement effective immediately upon the date of such notice of termination.
19.1.5 If either party files a petition under chapter of the Bankruptcy
Code, as amended, or for the appointment of a receiver, or if any involuntary
petition in bankruptcy is filed against such party and said petition is not
discharged with thirty (30) days, or if either party shall become insolvent or
make a general assignment for the benefit of its creditors, or if the business
or property of either party shall come into possession of its creditors or of a
governmental agency or of a receiver, or if any proceedings supplementary to
judgment shall be commenced against wither
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party, or if any judgment against either party, not fully bonded shall remain
unpaid in whole or in part for at least five (5) days after entry thereof, then,
in any case, the other party may at its option terminate this Agreement.
19.2 Upon termination of this Agreement, the following shall
apply:
19.2.1 Upon termination of this Agreement, except for termination as a
result of breach by Licensor, Licensee shall promptly return to Licensor, at
Licensee's sole cost and expense, in good repair, condition and working order,
ordinary wear and tear resulting from proper use thereof alone excepted, all
elements which comprise the Software Technology, including, without limitation,
all documentation and other information delivered by Licensor to Licensee
pursuant hereto, and all other documents, notes, and other materials specific to
gastrointestinal absorption prediction, related to the Software Technology and
Databases in Licensee's possession, together with written certification by an
authorized officer of Licensee that the original and all copies of the Software
Technology and Databases, including any unauthorized copies, and other related
materials in Licensee's possession, are no longer in use and have been returned
to Licensor or destroyed.
19.2.2 Licensee shall return to Licensor, at Licensee's sole cost and
expense, in good repair, condition and working order, ordinary wear and tear
resulting from proper use thereof alone excepted, all elements which comprise
the Databases, including, without limitation, all documentation and other
information delivered by Licensor to Licensee pursuant hereto, and all other
documents, notes, and other materials specific to gastrointestinal tract
absorption prediction and related to the Software Technology and Databases in
Licensee's possession, together with written certification by an authorized
officer of Licensee that the original and all copies of the Software Technology
and Databases, including any unauthorized copies, and other related materials in
Licensee's possession, are no longer in use and have been returned to Licensor
or destroyed. Licensee shall not be responsible for returning those portions of
the Databases that are in the public domain, or otherwise discoverable as
described in Section 14.2, supra, or which the parties have mutually agreed will
remain with the Licensee pursuant to a separate written agreement.
19.2.3 Licensee shall immediately discontinue all development,
marketing, licensing, sale or other distribution of the Software Technology or
the Databases.
19.2.4 Licensee shall immediately pay to the Licensor all Royalties and
other amounts due to the Licensor under this Agreement for "net revenues"
received by the Licensee prior to the effective date of termination. Licensee
shall thereafter pay when and as due under the terms of this Agreement all
Royalties payable to the Licensor for "net revenues" received by the Licensee
from and after the termination of this Agreement. The Licensee shall pay to the
Licensor when and as due under the terms of this Agreement any deficiency
required to fund the minimum Royalty due under this Agreement for the 12-month
period during which the termination of this Agreement occurred. For the 12-month
period in which the term of the license terminates, the $50,000 minimum Royalty
payable according to Section 10.2 will be proportionately adjusted, based upon
the portion of the 12-month period during which the term of the license was in
effect, based upon a 365-day year.
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19.2.5 If either party files petition under any chapter of the
Bankruptcy Code, as amended, or for the appointment of a receiver, or if any
involuntary petition in bankruptcy is filed against such party and said petition
is not discharged within thirty (30) days, or if either party shall become
insolvent or make a general assignment for the benefit of its creditors, or if
the business or property of either party shall come into the possession of its
creditors or of a governmental agency or of a receiver, or if any proceedings
supplementary to judgment shall be commenced against either party, or if any
judgment against either party, not fully bonded shall-remain unpaid in whole or
in part for at least five (5) days after entry thereof, then, in any case, the
other party may at its option terminate this Agreement.
SECTION 20.
REFORMATION, SEVERABILITY AND SURVIVAL
The provisions of this Agreement have been negotiated by
sophisticated parties with equal bargaining power and the parties agree that
such provisions are fair, reasonable and necessary under the circumstances. The
provisions set forth herein are intended as separate covenants and if any of
these provisions should ever be adjudicated to exceed the limitations permitted
by applicable law in any jurisdiction, then such provisions shall be deemed
reformed in such jurisdiction to the maximum limitations permitted by applicable
law. If any one of such provisions is declared invalid for any reason
whatsoever, and if any one of such provisions cannot be reformed as aforesaid,
such ruling shall not affect the validity of the remainder of the provisions.
The other provisions shall remain in effect as if the provisions had been
executed without the invalid provisions. The parties hereby declare that they
intend that the remaining provisions continue to be effective without any that
have been declared invalid and not reformed as aforesaid.
SECTION 21.
GOVERNING LAW AND VENUE
This Agreement shall be governed by, and construed in accordance
with, the internal substantive laws of the State of California, without regard
to choice of law or conflicts of law principles. Each of the parties hereto
recognizes and hereby irrevocably consents to the exclusive jurisdiction over it
or him, as the case may be, of the Federal District Court for the Central
District of California or the Superior Court of California, County of Los
Angeles, in connection with any action or proceeding (whether it be for contract
or tort, at law or in equity, or otherwise) arising out of or relating in any
way to this Agreement, or any other document relating hereto or delivered in
connection with the transactions contemplated hereby.
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SECTION 22.
REPRESENTATION BY COUNSEL
Each party hereto represents and agrees with the others that it
has been represented by, or had the opportunity to be represented by,
independent counsel of its own choosing, and that it has had the full right and
opportunity to consult with its respective attorneys, that to the extent, if
any, that it desired, it availed itself of this right and opportunity, that each
party is fully aware of the contents thereof and its meaning, intent and legal
effect, and that its authorized officer is competent to execute this Agreement
and has executed this Agreement free from coercion, duress or undue influence.
SECTION 23.
NOTICES
All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been delivered
three business days after having been mailed in a general or branch U.S. post
office and enclosed in a registered or certified post-paid envelope; one
business day after having been sent by overnight courier; when telecopied on a
business day, or otherwise on the next succeeding business day thereafter; and,
in each case, addressed to the respective parties at the addresses stated below
or to such other changed addresses the parties may have fixed by notice as
provided herein:
To the Licensor: TSRL, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to (not in lieu of notice to Licensor)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Hooper, Hathaway, Price, Beuche, & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
To the Licensee:
Simulations Plus, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
Telephone ▇▇▇-▇▇▇-▇▇▇▇
Facsimile ▇▇▇-▇▇▇-▇▇▇▇
With a copy to (not in lieu of notice to Licensee)
▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
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▇▇▇▇▇▇▇, Mesereau & Leids LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 24.
FEES AND COSTS
Except as otherwise provided herein, in the event of any claim
or controversy relating to this Agreement or the breach of this Agreement and
any action or proceeding brought by Licensor or Licensee against the other
(whether it be for contract or tort, at law or in equity, or otherwise) the
substantially prevailing party in such action or proceeding will be entitled to
recover from the other its costs and expenses incurred in taking or defending
such action or proceeding, including the appeal of such action, and including
reasonable fees of attorneys and other technical advisors.
SECTION 25.
CAPTIONS
The captions used in this Agreement are solely for the
convenience of the parties hereto and such captions do not constitute a part of
this Agreement.
SECTION 26.
COUNTERPARTS
This Agreement may be executed by the parties in two or more
counterparts, each of which together shall constitute one and the same
instrument.
SECTION 27.
ENTIRE AGREEMENT
27.1 This Agreement sets forth the entire agreement of the
parties hereto with respect to the transactions contemplated hereby. This
Agreement may not be amended except by an instrument in writing signed by the
parties hereto, and no claimed amendment, modification, termination or waiver
shall be binding unless in writing and signed by the party against whom or which
such claimed amendment, modification, termination or waiver is sought to be
enforced.
27.2 This Agreement merges and supersedes all prior and
contemporaneous agreements, assurances, representations, and communications
between the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
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effective as of the date shown above.
Licensor Licensee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------- ----------------------------------
Title: Chairman, TSRL Inc. Title: President, Simulations Plus, Inc.
--------------------------- ----------------------------------
Date: July 7, 1997 Date: July 9, 1997
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EXHIBIT A
Functional Specifications of the Software Technology and Databases
The Software Technology and Databases are more particularly described and
identified as "Gastro" which can be identified according to the following
models:
1.
17
