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the note, interest was set quarterly at the prime rate and was to
be paid during the term of the note with the principal due on
October 1, 2005.
Effective January 1, 1996, petitioner granted Uniplex
Software a nonexclusive worldwide license for a renewable 3-year
term to part of the developed technology. Effective July 8,
1996, CPSG, Inc. and Uniplex Software entered into a Software
License Agreement (source code license) whereby CPSG, Inc.
provided Uniplex Software with a worldwide, perpetual,
nonexclusive license to the InTEXT proprietary software. In
exchange, Uniplex Software covenanted to pay CPSG, Inc. $500,000
for the source code license, $350,000 initial license prepayment,
and a 2-percent royalty on Uniplex Software’s net revenue from
the distribution of the software until CPSG, Inc. received
$300,000, and thereafter a 1-percent royalty of the net revenue
from distribution of the software. The source code license
provided Uniplex Software with security for the $1.15 million
unsecured loan made to CPSG, Inc.
Annual sales of the InTEXT developed technology were
approximately $1.5 million during the years at issue. Annual
sales of the Operating Control System developed technology were
approximately $1 million for the subject years. Annual sales of
the Today developed technology approximated $2 million during the
period 1995 through 1997.
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