EXHIBIT 10.7
AF Services Software License Agreement
This Software License Agreement (this "Agreement") is entered into as
of September 1, 2004 (the "Effective Date") by and between AF Services, Inc.
("AF Services"), a Delaware corporation, and ▇▇▇▇▇.▇▇▇, Inc. ("eCOST"), a
Delaware corporation, both with a place of business at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and both subsidiaries of PC Mall, Inc. ("PC Mall")
also a Delaware corporation. In consideration of the mutual covenants and the
other terms and conditions contained herein, the Parties (as defined below)
hereby agree as follows:
Article I
DEFINITIONS
In addition to the capitalized terms defined elsewhere in this
Agreement, the following terms shall have the following meanings:
Section 1.1. Control. "Control" of a Person means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of an entity through the ownership of more than fifty percent (50%) of
the voting securities of such entity (or, in the case of a non-corporate person,
corresponding ownership interest).
Section 1.2. eCOST Website. "eCOST Website" shall mean the website operated by
eCOST and located at ▇▇▇▇://▇▇▇.▇▇▇▇▇.▇▇▇, primarily branded with the ▇▇▇▇▇.▇▇▇
and/or ECOST trademarks.
Section 1.3. Effective Date. "Effective Date" shall have the meaning set forth above.
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Section 1.4. Party or Parties. "Party" or "Parties" shall mean AF Services and/or eCOST, including their
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permitted successors and assigns.
Section 1.5. AF Services Confidential Information. "AF Services Confidential
Information" shall mean (a) any and all of the AF Services Software and all
technology, information and materials included in the foregoing items and its
related documentation, and (b) other technology, information and materials that
are designated in writing as proprietary or confidential (or with a similar
designation) or, if disclosed orally or by demonstration, are designated as
confidential or proprietary at the time of disclosure and summarized in a
writing so designated within thirty (30) days of the initial disclosure. AF
Services Confidential Information shall not include, however, information or
material which (i) is or becomes available to the relevant public other than as
a result of a wrongful act or omission, (ii) except with respect to the items
described in subsection (a) above, was available to eCOST (without a duty of
confidentiality owed to AF Services with respect to such information or
material) prior to its receipt from AF Services, (iii) becomes available to
eCOST from a Person not otherwise bound by a confidentiality agreement with AF
Services with respect to such information or material, or (iv) except with
respect to the items described in subsection (a) above, was independently
developed by eCOST without access to the AF Services Confidential Information.
Section 1.6. AF Services Software. "AF Services Software" shall mean the
graphics, software and documentation related thereto listed on Exhibit A that
are (a) intended by both Parties for use in operating the eCOST Website; and (b)
delivered or otherwise provided to eCOST by AF Services at any time (whether
prior to or after the Effective Date) during which PC Mall, Inc. Controlled or
Controls both AF Services and eCOST.
Section 1.7. Person. "Person" shall mean an individual, a general or limited
partnership, a corporation, a trust, a joint venture, an unincorporated
organization, a limited liability entity, or any other entity.
Article II
LICENSES
Section 2.1. License to AF Services Software. Subject to the terms and
conditions of this Agreement, AF Services hereby grants to eCOST a
non-exclusive, non-transferable (except as set forth in Section 9.8),
non-sublicensable, perpetual, royalty-free, worldwide right and license, under
the intellectual property rights of AF Services in and to the AF Services
Software, to reproduce, prepare derivative works of, modify, and use the AF
Services Software solely as reasonably necessary to operate the eCOST Website.
Section 2.2. Expanded Uses of AF Services Software. If eCOST wishes to use the
AF Services Software to operate any website other than the eCOST Website or to
otherwise expand its rights to the AF Services Software, then the Parties shall
discuss and negotiate such expanded license rights and consideration therefor.
Section 2.3. Reservation of Rights. Except for the express license granted
hereunder, AF Services retains all right, title and interest in and to the AF
Services Software, and nothing in this Agreement shall (or shall be construed
to) restrict, impair, transfer, license, convey or otherwise alter any of AF
Services's rights or proprietary interests in any intellectual property,
content, data, information or any other materials or rights, tangible or
intangible. eCOST does not acquire any rights, express or implied (whether by
implication, estoppel, inference or otherwise) other than those rights expressly
granted under this Agreement, and no other rights shall be implied, whether by
the conduct of the parties, this Agreement, delivery of any materials hereunder,
or otherwise. Except as expressly set forth in Section 9.8, eCOST may not
transfer, sublicense, or distribute AF Services Software or any other element
thereof. eCOST may use the AF Services Software only internally, and may not use
the AF Services Software to operate any website other than the eCOST Website or
to provide any other services. Nothing in this Agreement shall be construed to
prohibit or prevent AF Services from using the AF Services Software in
connection with its own goods or services or otherwise providing, licensing or
authorizing use of the same to third parties (for free or a fee, in AF
Services's sole discretion).
Article III
CONSIDERATION
Section 3.1. License Fee. Within thirty (30) days of the Effective Date, eCOST shall pay AF Services a
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license fee of Fifty Thousand Dollars ($50,000).
Article IV
CONFIDENTIALITY
Section 4.1. Limited Disclosure. eCOST will maintain the AF Services
Confidential Information in confidence and will not disclose such AF Services
Confidential Information to any third party without AF Services's prior written
consent. eCOST will not use any AF Services Confidential Information except as
necessary to exercise its rights and fulfill its obligations under this
Agreement or as may be required by an administrative body or applicable law.
eCOST may disclose AF Services Confidential Information only to eCOST's
employees and agents who have a need to know such Confidential Information for
such purposes and who have entered into written agreements with eCOST requiring
them to comply with the obligations set forth in this Article IV. eCOST will
protect the confidentiality and avoid the unauthorized use, disclosure,
publication, and dissemination of AF Services Confidential Information with the
same degree of care that eCOST uses to protect its own confidential and
proprietary information of similar nature and like importance, and in no event
with less than reasonable care. Notwithstanding the foregoing, eCOST's
confidentiality obligations with respect to the AF Services Software will not
preclude eCOST from using and displaying the graphics included in the AF
Services Software pursuant to the license granted in Section 2.1.
Section 4.2. Remedies. eCOST acknowledges and agrees that due to the unique
nature of the Confidential Information, a breach of its obligations under
Section 4.1 would cause AF Services irreparable harm and damage for which there
can be no adequate remedy at law. Therefore, upon any such breach or threatened
breach by eCOST, AF Services will be entitled to an immediate injunction,
restraining order and/or other appropriate equitable relief, in addition to
whatever remedies it may have under applicable law.
Section 4.3. Unauthorized Disclosures. eCOST will notify AF Services of any
actual or suspected unauthorized use or disclosure of Confidential Information
or infringement of any of AF Services Confidential Information of which eCOST
has knowledge. eCOST will reasonably cooperate with AF Services in the
investigation and prosecution of such unauthorized use, disclosure or
infringement.
Article V
WARRANTY AND DISCLAIMERS
Section 5.1. Authority. Each of AF Services and eCOST hereby represents and
warrants to the other that it has the corporate authority to enter into and
perform its obligations under this Agreement, and its execution, delivery and
performance of this Agreement have been duly and validly authorized.
Section 5.2. Limitation of Warranties. EXCEPT AS EXPRESSLY PROVIDED IN SECTION
5.1, ALL OF THE ASSETS, RIGHTS, TECHNOLOGY, AND OTHER INFORMATION AND MATERIALS
LICENSED OR OTHERWISE CONVEYED IN CONNECTION WITH THIS AGREEMENT ARE PROVIDED
"AS IS." PC MALL DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED,
STATUTORY, OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT OF
THIRD-PARTY RIGHTS. Without limitation of the generality of the foregoing, PC
MALL MAKES NO representation or warranty that the use or exploitation of THE AF
SERVICES SOFTWARE will be free from infringement of any intellectual property
right other than the rights expressly granted herein.
Article VI
LIMITATION Of LIABILITY
Notwithstanding anything herein to the contrary, AF Services shall have
no liability whatsoever for any incidental, indirect, consequential, punitive,
or special damages of any kind, or any loss of revenue or profits, loss of
business, or loss of data, arising out of or related to this Agreement or the
subject matter hereof, however caused and regardless of the theory of liability
(including contract, tort, or otherwise), even if informed in advance of the
possibility of such damages. In addition, in no event will the aggregate
liability of AF Services arising out of or relating to this agreement or the
subject matter hereof cumulatively exceed Fifty Thousand Dollars ($50,000).
Article VII
INDEMNIFICATION
eCOST, at its own expense, shall indemnify, hold harmless and defend AF
Services, its affiliates, successors and assigns, and its and their directors,
officers, employees and agents, against any third party claim, demand, cause of
action, debt, expense or liability (including attorney's fees and costs), to the
extent that it is based upon or arises out of any allegation that eCOST's
reproduction, modification or use of the AF Services Software infringes or
misappropriates any patent, copyright, trademark, trade secret, publicity,
privacy or other rights of any third person.
Article VIII
OTHER Agreements
Section 8.1. No Rights to Updates. Each Party retains all right, title and
interest in and to any modifications to the AF Services Software made by or for
such Party, and shall have no obligation to provide such modifications to the
other Party. In addition, neither Party assumes any obligations other than those
expressly set forth in this Agreement. Without limiting the generality of the
foregoing, neither Party is obligated to provide any software updates, or
consulting or technical assistance.
Section 8.2. No Obligation to Obtain New Rights. eCOST acknowledges that, from
and after the Effective Date, AF Services has no obligation to preserve,
protect, obtain or enforce any rights in the AF Services Software, including,
without limitation, any obligation to register any copyright, to file or
prosecute any patent application, or to bring actions for infringement or
misappropriation of the AF Services Software or any component thereof. Neither
this Agreement nor the conduct of either Party under this Agreement imposes or
shall be deemed to impose any such obligation, by implication, estoppel,
inference, or otherwise.
Section 8.3. Subject to Third Party Rights. Notwithstanding anything else in
this Agreement, neither Party shall be obligated to license or otherwise convey,
or be deemed to license or otherwise convey, any assets, rights, technology, or
other information or materials owned by, or subject to the rights of, a third
party, or any agreement with a third party, if and to the extent such Party does
not have the right so to license or convey. Without limiting the generality of
the foregoing, AF Services shall not be obligated to license or otherwise
convey, or be deemed to license or otherwise convey, to eCOST any rights in any
third-party tools used to develop the AF Services Software or any third party
software (including modules thereof) embedded in the AF Services Software. In
addition, eCOST acknowledges that various third party software is required for
operation and use of the AF Services Software and that eCOST will be solely
responsible for obtaining its own licenses of such software.
Section 8.4. No Obligation to Bring or Defend Legal Actions. Neither Party shall
have any obligation hereunder to bring any claim or action against any third
party for infringement or misappropriation of any of the intellectual property
rights licensed hereunder, or to defend any claim or action brought by a third
party with respect to any such intellectual property rights (including, without
limitation, a claim or action with respect to the validity or enforceability of
any such rights).
Article IX
MISCELLANEOUS
Section 9.1. Relationship of Parties. Nothing contained in this Agreement shall
be deemed to constitute either Party the partner, agent, or legal representative
of the other Party or to create any fiduciary relationship for any purpose
whatsoever. Except as otherwise specifically provided in this Agreement, nothing
in this Agreement shall confer on either Party any authority to act for, bind,
or create or assume any obligation or responsibility on behalf of the other
Party.
Section 9.2. Notices. All notices provided pursuant to this Agreement shall be
delivered by personal delivery, overnight courier, or facsimile, and shall be
deemed effective on the date on which delivery to the intended recipient of the
notice was accomplished. Such notices shall be delivered to the following
addresses:
If to AF Services: If to eCOST:
AF Services, Inc. ▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President Attn: Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Section 9.3. Choice of Law. This Agreement is to be construed in accordance with
and governed by the internal laws of the State of California (as permitted by
Section 1646.5 of the California Civil Code or any similar successor provision)
without giving effect to any choice of law rule that would cause the application
of the laws of any jurisdiction other than the internal laws of the State of
California to the rights and duties of the parties. Each party hereby
irrevocably consents to the jurisdiction and venue of the courts of Los Angeles
County, California and the United States District Court for the Central District
of California in connection with any claim, action, suit, or proceeding relating
to this Agreement. Neither party will commence or prosecute any claim, action,
suit, or proceeding relating to this Agreement other than in the courts set
forth in the preceding sentence, except either party may seek injunctive,
equitable or similar relief from any court of competent jurisdiction. The
provisions of the United Nations Convention on the International Sales of Goods
are hereby disclaimed and excluded.
Section 9.4. Entire Agreement. This Agreement constitutes the entire agreement
between the Parties pertaining to the subject matter hereof and supersedes all
previous communications, agreements, and understandings between the Parties
relating to the subject matter hereof. Neither Party has entered into this
Agreement in reliance upon any representation, warranty, or undertaking of the
other Party that is not set out or referred to in this Agreement.
Section 9.5. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
Section 9.6. Headings. The section or other headings herein are inserted only
for convenience and ease of reference and are not to be considered in the
construction or interpretation of any provision of this Agreement. Unless
otherwise stated, references to Sections herein are references to Sections
hereof.
Section 9.7. Amendments; Waivers. This Agreement may be amended, and the taking
of any action required hereunder may be waived, only by the written consent of
each Party at the time such amendment or waiver is sought. No such waiver shall
operate as a waiver of, or estoppel with respect to, any other action. No
failure to exercise, and no delay in exercising, any right, remedy, or power
hereunder shall operate as a waiver thereof, nor shall single or partial
exercise of any right, remedy, or power hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, or power provided
herein or by law or at equity. The waiver of the time for performance of any act
or condition hereunder does not constitute a waiver of the act or condition
itself.
Section 9.8. Successors; No Assignment. eCOST may not assign, sell, delegate, or
otherwise transfer, whether voluntarily or involuntarily and whether by
operation of law or otherwise, this Agreement or any right or obligation
hereunder; provided, however, that eCOST may transfer this Agreement in its
entirety to eCOST's successor as part of a merger, consolidation, or sale of all
or substantially all of eCOST's business and assets, provided that such
successor agrees to be bound by all the terms and conditions of this Agreement.
In any event, the parties acknowledge and agree that, if there is a merger,
consolidation or sale of business or assets involving eCOST, the rights in the
AF Services Software of eCOST or its successor shall apply only to the business
of eCOST as it existed before the merger, consolidation or sale, and, without
limitation, the right to use the AF Services Software shall be limited to use
solely as reasonably necessary to operate the eCOST Website. Any purported
assignment, sale, delegation or other transfer in violation of this Section 9.8
shall be null and void. Subject to the foregoing limits on assignment and
delegation, this Agreement shall be binding upon and shall inure to the benefit
of the Parties and their respective successors and assigns.
Section 9.9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same Agreement.
Section 9.10. Recovery of Costs and Attorney's Fees. In any legal action, or
other proceeding brought to enforce or interpret the terms of this Agreement,
the substantially prevailing Party shall be entitled to reasonable attorney's
fees and any other costs incurred in that proceeding in addition to any other
relief to which it is entitled.
Section 9.11. Third Party Beneficiaries. The provisions of this Agreement are
solely for the benefit of the Parties (including their permitted successors and
assigns), and not for the benefit of any third party.
IN WITNESS WHEREOF, the Parties have caused this Agreement to
be executed by their duly authorized representatives as of the Effective Date.
AF SERVICES, INC.
By: /s/ Simon Abuyounes___________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
▇▇▇▇▇.▇▇▇, INC.
By: /s/ ▇▇▇▇ ▇. Shaffer___________________________
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer
Exhibit A
Exhibit A
AF Services Software
1. All modules of the eCommerce Engine, including the following modules:
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eCommerce
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Shipping Logic
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Content Management
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Catalog Management
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Catalog Generation
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Search Engine (Simple and Advanced)
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Pricing Management
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Rebates and Promotions Engine
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Ad Manager
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Order Tracking/Order Status
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e-Subscription
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e-mail Notification Engine
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Profiler
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eCOST HotSheet Management and distribution
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Custom Catalog/Extranet
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For purposes of this Agreement, "eCommerce Engine" means the above
modules as well as shopping cart, order entry, shipping and billing information
entry.