SOFTWARE LICENSING AGREEMENT 1 INTRODUCTION 1.1 This is an Agreement between Intelligent Resources Inc. and its customer [customer name] under which Intelligent Resources Inc. is licensing software on a non-exclusive basis for the customer's own use under the terms and conditions stated below. 2 DEFINITIONS As used in this Agreement, the following definitions shall apply: 2.1 "Agreement" shall mean this Agreement between Vendor and Customer. 2.2 "Confidential Information" shall mean any information relating to or disclosed in the course of the Agreement, which is or should be reasonably understood to be confidential or proprietary to the disclosing party. "Confidential Information" shall not include information (a) already lawfully known to the receiving party, (b) disclosed in published materials, (c) generally known to the public or (d) lawfully obtained from any third party. 2.3 "Customer" shall mean [customer name] 2.4 "Delivery Date" shall mean the date that Vendor ships the Program to Customer. 2.5 "Documentation" shall mean the user manual(s) and any other materials supplied by Vendor for use with the Program or with any Release. This includes http://rayfract.com/help/manual.pdf, http://rayfract.com/help/rayfract.pdf, our short course http://rayfract.com/SAGEEP10.pdf, our tutorials at http://rayfract.com/tutorials/TUTORIAL.ZIP and latest release notes at http://rayfract.com/help/release_notes.pdf . 2.6 "Effective Date" shall mean the date upon which both parties have signed this Agreement. 2.7 "License Fee" shall mean the fee for any Program licensed to Customer as set forth on Vendor's then current License Fee Schedule. 2.8 "License Fee Schedule" shall mean Vendor's listing of Programs and Licence Fee as it may be in effect from time to time. Vendor reserves the right to change the License Fee Schedule without notice. 2.9 "Program" shall mean the machine-readable object code of Vendor's Rayfract software product which Customer is currently licensing from Vendor or licenses now or in the future from Vendor and such additional Releases of Rayfract as shall be supplied by Vendor to Customer from time to time together with its Documentation. Furthermore, the hardkey delivered by Vendor is considered to be an integral part of Program. 2.10 The term "Release" shall mean any version of a Program or any materials which are supplied by Vendor at or after the delivery of a Program, including any software provided for the purpose of improving the functions or performance of the Program, changing the intellectual property contained in the Program, expanding the capability or ease of operation of the Program, or for the purpose of fixing errors in program logic, together with Documentation. 2.11 The term "Software Support" shall mean support and maintenance services for Programs provided for in this Agreement. 2.12 The term "Software Support Fee" shall mean that applicable annual fee due for Software Support in accordance with Vendor's Software Support Schedule. 2.13 The term "Software Support Schedule" shall mean Vendor's written statement of Software Support offered and the fees due for such Software Support as it may be in effect from time to time. Vendor reserves the right to change the Software Support Schedule without notice. 2.14 The term "Supported Products List" shall mean a list of Program versions, together with associated computer hardware and operating system software platforms, for which Vendor provides Software Support. Vendor reserves the right to change the Supported Products List without notice. 2.15 "Vendor" shall mean Intelligent Resources Inc., Suite 142, 757 West Hastings Street, Vancouver B.C. V6C 1A1 Canada. 3 GRANT OF LICENSE 3.1 Vendor hereby grants to Customer, and Customer hereby accepts, a permanent non-exclusive license to use the Program subject to the terms and provisions of this Agreement. 3.2 The license granted by this Agreement authorizes use of the Program by no more than 1 (one) concurrent users, who shall be employees of Customer ("Authorized Users"). 3.3 The Program may be installed on multiple computers or workstations. It may be run by one user at a time only, with the hardkey provided by Vendor attached to the user's computer. 3.4 The Program may not be installed on a network. 4 SCOPE OF THE AGREEMENT 4.1 This Agreement shall apply to each Program or Release of a Program that Customer is currently licensing from Vendor or shall licence in the future. 5 RESTRICTION AGAINST THIRD PARTY USE 5.1 The Program may not be used by any person or entity that is not an employee of Customer. Students are considered as employees of their university, in the context of this agreement. 6 COPIES OF THE PROGRAM 6.1 Vendor shall furnish to Customer one copy of the Program. 6.2 Customer shall have the right to make one copy of the machine-readable object code for the Program solely for archive purposes. On such archival copy, Customer shall mark copyright, trademark, patent, and/or trade secret notices identical to those on the copy of the Program provided to Customer. 6.3 Customer shall be entitled to make additional copies of the Program and Documentation to the extent necessary for use of the Program by Authorized Users. Customer shall reproduce and include copyright or trade secret notices on any copies in the same text as stated in the copies provided to Customer. 7 INSTALLATION AND APPLICATION 7.1 Installation of the Program on a computer shall be Customer's responsibility. Customer shall follow the installation and application procedures contained in the Documentation. 8 DATA CONVERSION 8.1 Customer may optionally employ Vendor with data conversion. The conversion of Customer's data files from Customer's current system shall be carried out by Vendor at a charge determined by Vendor's current fee schedule for such work payable thirty (30) days after invoice. Customer shall provide all information reasonably required for conversion. Vendor shall use reasonable efforts in converting the data; however, all converted data files shall be supplied "AS IS" AND VENDOR DISCLAIMS ALL WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE WITH REGARD TO CONVERTED DATA FILES. It shall be Customer's obligation to test the converted date files to verify the accuracy of the conversion of data. 9 ACCEPTANCE 9.1 The Program will be deemed accepted when the Program has been installed and performs to Customer's reasonable satisfaction. If Customer is not satisfied with the Program, he will notify Vendor and return the hardkey device supplied by Vendor, as well as all other parts and Documentation obtained from Vendor. 10 PAYMENT OF PROGRAM LICENSE FEE 10.1 In consideration of the license granted under this Agreement, Customer shall pay to Vendor the License Fee upon Customer's acceptance of the Program and the then following execution of this Agreement. 11 ACKNOWLEDGMENT OF VENDOR'S OWNERSHIP RIGHTS 11.1 Customer acknowledges that it obtains no ownership rights in the Program under the terms of this Agreement. All rights in the Program including but not limited to Confidential Information, trade secrets, trademarks, service marks, patents, and copyrights are, shall be and will remain the property of Vendor. All copies of the Program delivered to Customer remain the property of Vendor. 12 CONFIDENTIAL INFORMATION 12.1 Customer acknowledges that the Program and the Documentation contain proprietary and Confidential Information of Vendor. Customer agrees to keep the Program and Documentation in confidence and to take all reasonable precautions to ensure that no unauthorized persons have access to the Program and Documentation and that no unauthorized copies are made. Breach of this provision shall be grounds for immediate termination of this Agreement without further obligation to Customer, at Vendor's option. 12.2 Customer may not alter any proprietary markings on the Program, including copyright, trademark, trade secret, and patent legends. 12.3 Customer may not decompile, disassemble, or reverse engineer the Program. 13 CUSTOMER'S OBLIGATION FOR DATA PROTECTION 13.1 Customer is required to perform daily backups of the data on the computer system used by the Program so that the likelihood of data loss is minimized. Customer shall be solely responsible for backup software and hardware. Customer shall provide the safe storage of all backup tapes and/or disks. Customer shall be responsible for keeping its computer system free of computer viruses. 14 WARRANTY 14.1 Vendor warrants that the Program will perform substantially in accordance with accompanying Documentation for a period of one year from the date of Customer's acceptance of the Program ("Warranty Period") and for any period in which Software Support is paid for and in effect under the terms of this Agreement. 14.2 VENDOR AND ANY THIRD PARTY FROM WHOM VENDOR HAS LICENSED SOFTWARE OR TECHNOLOGY DISCLAIM ALL OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT, WITH RESPECT TO THE PROGRAM AND THE ACCOMPANYING WRITTEN MATERIALS. 14.3 VENDOR AND ANY THIRD PARTY FROM WHOM VENDOR HAS LICENSED SOFTWARE OR TECHNOLOGY WILL NOT BE LIABLE FOR LOST PROFITS, LOST OPPORTUNITIES, OR INCIDENTAL OR CONSEQUENTIAL DAMAGES UNDER ANY CIRCUMSTANCES. 14.4 EXCLUSIVE REMEDY: CUSTOMER'S EXCLUSIVE REMEDY AGAINST ANY PARTY FOR BREACH OF THIS AGREEMENT SHALL BE, AT VENDOR'S CHOICE, (A) CORRECTION OF ANY ERROR OR DEFECT IN THE PROGRAM AS TO WHICH CUSTOMER HAS GIVEN NOTICE (B) REPLACEMENT OF THE PROGRAM INVOLVED. 14.5 If any problem, operational failure or error of the Program has resulted from any alteration of the Program, accident, abuse, or misapplication, including not following instructions in the Documentation, then this warranty shall be null and void, at Vendor's option. 15 OVERALL LIMITATION OF DAMAGES 15.1 IN NO CASE SHALL THE AGGREGATE AMOUNT OF DAMAGES PAYABLE TO CUSTOMER FROM ANY AND ALL PARTIES FOR ANY CLAIM ARISING FROM THE PROGRAM OR THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, ITS WARRANTY AND INDEMNIFICATION PROVISIONS) EXCEED THE AMOUNTS PAID BY CUSTOMER TO VENDOR UNDER THIS AGREEMENT. 16 INDEMNIFICATION 16.1 Vendor agrees to indemnify and hold Customer harmless against any loss, damage, expense, or cost, including reasonable attorneys' fees, arising out of any claim, demand, or suit asserting that the Program infringes or violates any copyright, patent, trade secret, trademark, or proprietary right existing under the laws of Canada ("Claim"), subject to the overall limitation of damages hereunder. 16.2 The indemnification obligation in this section shall be effective only if (1) at the time of the alleged infringement, Customer was using a currently supported version of the Program listed in Vendor's then current Supported Products List, (2) Customer gave prompt notice of the Claim and permitted Vendor to defend, and (3) Customer has reasonably cooperated in the defense of the claim. Vendor shall have no obligation to Customer to defend or satisfy any claims made against Customer that arise from the use, sale, licensing or other disposition of the Program by Customer other than as permitted by this Agreement or from the Customer's modification of the Program. 16.3 To reduce or mitigate damages, Vendor may at its own expense procure the right for Customer to continue licensing the Program or replace it with a non-infringing product. If Vendor supplies a non-infringing Release of the Program, Customer shall promptly install it on its computer system, and terminate use of prior Releases of the Program. If Customer is not entitled to such non-infringing Release under the terms of the Vendor's Software Support arrangement with Customer, Customer shall pay any applicable fee for upgrading to the non-infringing Release, as stated in Vendor's then current fee schedule, within thirty (30) days of delivery of such Release. If, in its judgment, Vendor deems that, due to the Claim or for any other reason, it is not in Vendor's practical interest to continue distributing a Program, Vendor may require customer, upon thirty (30) days written notice, to terminate use of a Program. Thirty days after notice to terminate use of a Program, this Agreement shall terminate as to the Program involved, Customer shall receive a refund of a percentage of the current year's Software Support Fee for the Program corresponding to the remaining portion of the year, and in addition, if such termination takes place during the first year after the Delivery Date, a refund of a percentage of the License Fee for such Program corresponding to the remaining portion of the first year. THE FOREGOING IS CUSTOMER'S EXCLUSIVE REMEDY AGAINST ANY AND ALL PARTIES FOR ANY CLAIM ARISING FROM OR RELATING TO LOSS OF USE OF THE PROGRAM OR TO ANY OTHER DAMAGE ARISING AS A RESULT OF THIS PROVISION. 17 SOFTWARE SUPPORT 17.1 Software Support for the Program shall consist of the services listed on Vendor's then current Software Support Schedule, which may change from time to time. 17.2 During the Warranty Period specified above, Customer shall be entitled to software support without additional charge. "Expiration Date" shall mean the date of the expiration of the Warranty Period and each subsequent anniversary of such date. Before each Expiration Date, Customer shall be billed for the then applicable annual Software Support Fee. If Customer has paid the applicable Software Support Fee on or before the Expiration Date, Customer shall be entitled to receive an additional year of Software Support. Vendor shall have no obligation to provide Software Support after the Expiration Date if the applicable Annual Software Support Fee is unpaid. 17.3 The Software Support Fee shall be sent to Vendor at the address set forth above, or such other address as Vendor may designate. Information as to the amount of the currently applicable Software Support Fee for the Program is available from the Vendor on request. 17.4 Vendor's current policy is to support the most recently released version of the software and the next prior version, and to cease maintenance of earlier versions. However, Vendor reserves the right to change this policy in its discretion and reserves the right to discontinue support of Programs or versions of Programs for hardware and/or operating systems that are used by numbers of customers that Vendor deems inadequate to justify the cost of support. 17.5 Customer agrees that in order to receive Software Support for a Program, Customer must use a currently supported version of the Program, as listed in Vendor's Supported Products List, which is available from Vendor. Customer acknowledges and agrees that it may be necessary to update its computer hardware and/or operating system to achieve compatibility with the currently supported version. Customer acknowledges and agrees that if it has allowed its subscription to Software Support to lapse, and if its version of the Program is not currently supported, it may have to obtain a current version to obtain Software Support, as is discussed below. 17.6 If Customer is not using a currently supported version of the Program as listed in Vendor's Supported Products List, Vendor may suspend provision of Software Support for the Program until Customer cures this condition without refunding the Software Support Fee. 17.7 Customer may terminate Software Support by written notice to Vendor prior to any Anniversary of the Delivery Date. However, Vendor shall not be required to refund any Software Support Fee. 17.8 If Software Support has been terminated or has lapsed, Customer may reinstate its subscription to Software Support upon payment of (1) the annual Software Support Fee in effect at the time, plus (2) a reinstatement fee equal to the greater of (a) the difference between the License Fee paid hereunder and the applicable license fee for the then current version of the Program and (b) US $200. Upon reinstatement of Software Support, Customer will be upgraded to the current version of the Program. 18 TERM AND TERMINATION 18.1 The term of this Agreement shall commence upon the Effective Date and shall continue in effect until terminated as provided for herein. 18.2 It is agreed that either party may terminate this Agreement immediately upon written notice to the other party in the event that such other party (a) becomes insolvent or makes an assignment for the benefit of creditors; (b) files or has filed against it any petition under any applicable bankruptcy, insolvency, reorganization or similar debtor relief law which is not discharged within thirty (30) days of said filing, or (c) requests or suffers the appointment of a trustee or receiver, or the entry of an attachment or execution as to a substantial part of its business or assets. 18.3 Vendor may terminate this Agreement in the event Customer (a) fails to make when due any Licence Fee payment or other payment required under this Agreement; (b) commits a material breach of any of its obligations concerning scope of use or the protection of the Program, Documentation, intellectual property of Vendor, and Confidential Information; or (c) materially breaches any of its other obligations under any provision of this Agreement, which breach is not remedied within thirty (30) days after notice thereof by Vendor to Customer. 19 RIGHTS UPON TERMINATION 19.1 Upon termination of this Agreement, Customer's licence to use the Program shall terminate, and Customer shall immediately turn over to Vendor all copies of the Program and Documentation, and any other Confidential Information relating to the Program and Documentation and shall remove and erase completely any copies of the Program installed or recorded on any hard disk or other storage medium. Customer shall promptly certify to Vendor in writing that it has complied with this requirement. 19.2 Upon termination of this Agreement, Customer shall pay to Vendor all fees due through the effective date of such termination. Unless otherwise specified herein or otherwise agreed in writing, all fees collected or accrued prior to the date of termination shall be retained by Vendor without any pro rata refund to Customer. 19.3 The termination of this Agreement shall not extinguish any rights or obligations of the parties relating to protection of Confidential Information. 20 GENERAL PROVISIONS 20.1 Applicable Law. This Agreement shall be construed pursuant to substantive law of Canada. . 20.2 Upon delivery and installation of the Program and the Documentation, Customer shall assume all risk of loss and damage to the Program and the Documentation, and shall at its sole cost and expense replace any lost or damaged portion thereof. 20.3 Required Consents. Customer warrants that it has obtained lawful permission to use all hardware and software required in order for the Program to be used on Customer's computer system. 20.4 Public Reference. Customer consents to the public use of its name as a customer of Vendor. 20.5 Modification. This Agreement may not be modified or amended except by a writing which is signed by authorized representatives of each of the parties. 20.6 No Waiver. The failure of either party to exercise any right or the waiver by either party of any breach, shall not prevent a subsequent exercise of such right or be deemed a waiver of any subsequent breach of the same or any other term of the Agreement. 20.7 Notice. Any notice required or permitted to be sent hereunder shall be in writing and shall be sent in a manner requiring a signed receipt, such as Federal Express, courier delivery, or if mailed, registered or certified mail, return receipt requested. Notice is effective upon receipt. 20.8 Force Majeure. Neither party shall be deemed in default of this Agreement to the extent that performance of their obligations or attempts to cure any breach are delayed or prevented by reason of any act of God, fire, natural disaster, accident, act of government, shortages of materials or supplies or any other cause beyond the control of such party ("Force Majeure") provided that such party gives the other party written notice thereof promptly and, in any event, within fifteen (15) days of discovery thereof and uses its best efforts to cure the delay. In the event of such Force Majeure, the time for performance or cure shall be extended for a period equal to the duration of the Force Majeure but not in excess of three (3) months. 20.9 Entire Agreement. This Agreement constitutes the sole and entire agreement of the parties with respect to the subject matter hereof and supersedes any prior oral or written promises or agreements. There are no promises, covenants or undertakings other than those expressly set forth in this Agreement. 20.10 Equitable Remedies. The parties recognize that money damages is not be an adequate remedy for any breach or threatened breach of any obligation hereunder by Customer involving intellectual property, Confidential Information or use of the Program beyond the scope of the license granted by this Agreement. The parties therefore agree that in addition to any other remedies available hereunder, by law or otherwise, Vendor and any third party from whom vendor has licensed software or technology shall be entitled to an injunction against any such continued breach by Customer of such obligations. 20.11 Arbitration. Any dispute relating to the terms, interpretation or performance of this Agreement (other than claims for preliminary injunctive relief or other pre-judgment remedies) shall be resolved at the request of either party through binding arbitration. Arbitration shall be conducted in Vancouver, Canada. 20.12 Late Fees, Costs and Attorneys Fees. A late payment charge of 1.5% per month, compounded monthly, shall apply to any payment due from Customer that is in arrears for a period exceeding thirty (30) days. In any legal action or arbitration proceeding brought on account of a breach, the prevailing party shall recover from the other party all costs of litigation or arbitration, including reasonable attorneys fees. 20.13 Exclusive Jurisdiction and Venue. Any cause or action arising out of or related to this Agreement, including an action to confirm or challenge an arbitration award, may only be brought in the courts of applicable jurisdiction in Canada, and the parties hereby submit to the jurisdiction and venue of such courts. So agreed between the parties signing below. Intelligent Resources BY: Siegfried Rohdewald PRINT NAME: TITLE: Date: [customer name] BY: PRINT NAME: TITLE: Date: