PRISM NON-EXCLUSIVE LICENSE AGREEMENT
This agreement ("Agreement") is made this 28 day of April 1998, by Xxxxxx,
Inc., a Delaware corporation, having a place of business at Xxx Xxxxxxxx Xxxxxx,
Xxxxxxxxxx, XX 00000 ("Xxxxxx"), and Transaction Systems Architects, Inc., a
Nebraska corporation, having a place of business at 000 Xxxxx 000 Xxxxxx, Xxxxx,
XX 00000, on behalf of itself and all of its current and future Subsidiaries
(collectively "TSA" and together with Xxxxxx, the "Parties" and each singularly
a "Party"). A Wholly-owned Subsidiary shall be any entity that is owned 100% by
TSA. A Non-wholly-owned Subsidiary shall be any entity that is at least 50%
owned by TSA but is not a Wholly-owned Subsidiary. TSA and its Subsidiaries
shall be jointly and severally liable hereunder. A current list of Subsidiaries
is set forth on Schedule G. An updated Schedule G will be provided upon Nestor's
request. If during the term of this Agreement a Wholly-owned Subsidiary becomes
a Non-wholly-owned Subsidiary it have only the rights of a Non-wholly-owned
Subsidiary; if during the term of this Agreement a Subsidiary becomes a
Non-Subsidiary it have only the rights, if any, of a Non-Subsidiary. All
Subsidiaries are either Wholly-owned Subsidiaries or Non-wholly-owned
Subsidiaries.
Other capitalized terms not defined herein are defined in Schedule A.
WHEREAS TSA wishes to acquire a world-wide, non-exclusive, limited license
to copy, use and sublicense a software product developed by Xxxxxx called PRISM
(the "Xxxxxx Software"), which software is more fully described in Schedule A;
NOW THEREFORE, the Parties agree as follows:
X. Xxxxx of License.
A. Subject to the provisions of this Agreement, Xxxxxx hereby grants to TSA, and
TSA accepts, a personal, nontransferable and non-exclusive, world-wide license
(the "License"), but only:
1. to use, on the premises of TSA and by TSA employees only, those portions of
the Xxxxxx Software which are identified in the Schedule as source code for
(i) creating interfaces between the Xxxxxx Software and TSA Products,
(ii) translating into foreign languages the English language expressions
that form part of the graphical user interface of the Analysis/Review System (in
the event Xxxxxx desires to use such translation with its other licensees Xxxxxx
shall reimburse TSA the pro-rata reasonable costs of developing such
translation) and
(iii) modifying the Analysis/Review System; provided that, in the case of
this clause (iii), (a) TSA shall have first requested that Xxxxxx make such
modification and Xxxxxx shall have declined to do so, and (b) such modification
shall become a part of the Xxxxxx Software and shall be owned by Xxxxxx and
licensed to TSA under this Agreement, except that Nestor's obligations pursuant
to Sections IV A and V B shall not apply to any such modification made TSA; and
further provided that unless Xxxxxx has approved the modification if done by
TSA, Nestor's obligations pursuant to Section VIIIA shall not apply to any such
modification or any other portions of the Xxxxxx Software effected by such
modifications.
2. to sublicense and distribute, within the Field-of-Use, in object-code form
only, copies of Xxxxxx Software to customers ("Sublicensees") (provided
that TSA reproduces on all such copies any copyright and other proprietary
notices of Xxxxxx); and
3. to reproduce, modify, and adapt the user documentation of the Xxxxxx
Software, provided any such modification that may affect Nestor's
intellectual property rights shall be subject to Nestor's prior written
approval; and
4. to use, on the premises of TSA and by TSA employees only, copies of the
Xxxxxx Software solely for testing, development (only as set forth in
Section I.A.1), and maintenance purposes and object code only copies for
demonstration purposes; and
5. to appoint TSA distributors ("Distributors") which may exercise some or all
of the rights granted to TSA herein in the same manner as TSA can exercise
such rights; provided
(i) TSA shall not deliver to any Distributor any part of the Xxxxxx
Software in source code, except TSA may disclose to any Distributor the source
code described in Section I.A.1.(ii), but only for the purpose of translation
into foreign languages as permitted by Section I.A.1.(ii);
(ii) To the maximum extent permitted by law, TSA shall prohibit each
Distributor from disassembling, decompiling, or "reverse engineering" any part
of the Xxxxxx Software delivered in object code, and
(iii) TSA shall have entered into an agreement with each Distributor
containing such terms and conditions as are necessary to effectuate the
provisions and/or limitations on use of Sections I.B and V.C, D, E and F of this
Agreement.
TSA will indemnify, defend and hold Xxxxxx harmless from all expenses,
damages and costs (including reasonable attorney's fees) or losses resulting
from (i) any act or omission by any Distributor that would breach the provisions
of this Section I.A.5 and (ii) any act or omission of a Distributor that, if
committed by TSA, would constitute a breach of this Agreement;
B. Except as expressly permitted in Section I.A of this Agreement, and except as
required to effectuate the intentions of the Parties as expressly set forth
herein, TSA shall not have any right to use, sublicense, copy, modify, create
derivative works from, rent, lease, assign or transfer any Xxxxxx Software.
To the maximum extent permitted by law, TSA is prohibited from
disassembling, decompiling, or "reverse engineering" in any way any part of the
Xxxxxx Software delivered to TSA in object-code form.
C. All rights not expressly granted to TSA are reserved by Xxxxxx. All
modifications made by TSA under Subsection I.A.1 shall become a part of the
Xxxxxx Software and shall be owned by Xxxxxx and licensed to TSA under this
Agreement, and TSA hereby grants to Xxxxxx all right, title and interest,
including but not limited to copyright rights in such modifications.
X. Xxxxxx agrees, so long as this Agreement is in place, not to grant a similar
re-seller license to any third party which would allow such third party to
sublicense the Xxxxxx Software on a Base24 software platform nor shall grant a
similar re-seller license to the entities listed on Schedule D. TSA may, not
more often than two years and on ninety days notice, change the identities (but
not the total number) of the entities on such Schedule. This subsection D is not
applicable to licenses which Xxxxxx has in place with third parties as of the
date of this Agreement or at the date of a change in the Schedule, nor shall it
be applicable for licenses which Xxxxxx is required to offer by statute or
applicable precedent.
E. Notwithstanding anything set forth above, Distributors and Non-wholly-owned
Subsidiaries may only use, under this Section, the Xxxxxx Software for the
purposes set forth in subsection I.A.1(ii) above. No source code other than as
necessary to develop the modifications set forth in subsection I.A.1(ii) above
shall be provided to Distributors or Non-wholly-owned Subsidiaries.
F. TSA shall take all lawful steps to fully and timely enforce all provisions of
any agreement of any kind between it and any Distributor, Sublicensee,
consultant or third party which agreement is authorized by this Agreement and
relates in any way or is in connection with the Xxxxxx Software or the Xxxxxx
Technology. TSA shall promptly notify Xxxxxx of any such commencement of any
such enforcement action and provide Xxxxxx with such status reports therein as
Xxxxxx may reasonably require. TSA shall promptly notify Xxxxxx if the validity
of Nestor's patent, copyright, trade secret, trademark or other proprietary
property rights have become at issue in any such action, in which case Xxxxxx
may at any time thereafter assume the responsibility for enforcement of such
action. If Xxxxxx assumes such responsibility, TSA shall have no further
responsibility or liability therefor, Xxxxxx shall have the right to make all
decisions in the matter and any action Xxxxxx may take therein shall be without
any liability of Xxxxxx to TSA.
II. Right to Sublicense.
A. A sublicense may not:
(1) transfer any right, title or interest in the Xxxxxx Software (other
than the right to use Xxxxxx Software under the terms of the sublicense;
(2) allow any Sublicensee to re-sublicense, unless such Sublicensee was
never intended to be an entity for which the Xxxxxx Software was to be used on a
productive basis; provided any North American Sublicensee will not be allowed to
sublicense under any circumstances without Nestor's written consent.
B. Each sublicense shall also contain substantially those terms set forth in
Sections 1.0, 8.0, 10.0 and 11.0 of the Base 24 Agreement and Sections 2.2, 2.6,
2.7, 2.8, 6.0, 7.0, 8.0, 9.0. 11.0, and 12.0 of the Attachment, as set forth on
Schedule C.
C. Upon request, TSA shall deliver to Xxxxxx one copy of (i) all documentation
relating to each version of the Xxxxxx Software, including but not limited to
all packaging and related materials of any kind referring to Xxxxxx, the Xxxxxx
Software or using any trademark of Xxxxxx, and (ii) all TSA advertising or other
marketing material of any kind referring to Xxxxxx, the Xxxxxx Software or using
any trademark of Xxxxxx.
III. Royalty Rate, Payment and Related Matters.
A. TSA shall pay to Xxxxxx during the term of this Agreement royalties as set
forth in Schedule A. Any amount due under this Agreement shall be paid when
specified in this Agreement, or, if not so specified, within thirty (30) days
after the date of any invoice therefor.
Except as provided in Section IV of this Agreement and except if a breach
of VIII.A requires TSA to refund amounts received under a sublicense or
distribution agreement, no payment shall be subject to a refund.
All payments due to Xxxxxx from TSA shall be made in U.S. Dollars. If the
Royalty Base underlying the calculation of any part of Earned Royalties shall he
received by TSA in currency other than U.S. Dollars, such Royalty Base shall be
converted to U.S. Dollars at the exchange rate published in the Wall Street
Journal for the last day of the month immediately preceding the date of payment
of such Earned Royalty.
Xxxxxx may charge interest on any amount not paid when due at the lower of
one (1 %) percent per month or the maximum rate allowed by law.
B. TSA shall be liable and responsible for payment of all taxes and duties
(except income taxes accrued against Xxxxxx) arising from this Agreement and
shall indemnify and hold Xxxxxx harmless from any failure of TSA to do so.
C. Within thirty (30) days after the end of each calendar quarter during the
term of this Agreement, TSA shall deliver to Xxxxxx a report setting forth the
number of sublicenses of Xxxxxx Software during such quarter, together with an
accounting of all amounts constituting a part of the Royalty Base and a
calculation of Earned Royalties. TSA will keep such records as will enable the
royalties payable hereunder to be accurately determined by Xxxxxx. Such records
will be retained by TSA and made available, not more frequently than once during
each calendar year of this Agreement, to an independent certified public
accountant selected by Xxxxxx for examination at the request and at the expense
of Xxxxxx during reasonable business hours at the offices of TSA for a period of
at least five (5) years after the date of the transactions to which the records
relate.
If any such audit determines that TSA has understated an amount owed to
Xxxxxx by TSA, TSA shall promptly pay to Xxxxxx the amount of such
understatement. If any audit determines that any such amount is understated by
more than five percent (5%), TSA shall additionally reimburse Xxxxxx for the
costs of that audit. If any such audit determines that TSA has overpaid an
amount owed to Xxxxxx by TSA, TSA shall be entitled to a credit against future
amounts owed to Xxxxxx in the amount of such overpayment.
IV. Third-Party Claims and Actions; Infringement and Unauthorized Use
A. Provided TSA has promptly upon learning of a claim or action (but in any
event with sufficient notice not to cause Nestor's loss of its right to defend)
notified Xxxxxx in writing of an claim or action in which it is alleged that the
Xxxxxx Software infringes (i) a United States issued patent, trade secret, or
copyright or (ii) a foreign patent, trade secret or copyright, and TSA, at no
cost to Xxxxxx (except for reasonable out-of-pocket expenses), fully cooperates
with Xxxxxx in such settlement or defense, then Xxxxxx at its sole expense shall
take sole control of the settlement of such claim and the defense of any
litigation resulting solely therefrom and shall be responsible for the costs of
such defense and will indemnify and hold TSA harmless from the cost of any
settlement or judgment resulting solely therefrom.
If, in connection with any such claim, Xxxxxx xxxxx it advisable to replace
parts of the Xxxxxx Software, TSA shall accept such replacement provided that it
has substantially the same functions and features as the part replaced and is
replaced at no cost to TSA or its Sublicensees. If, as a final result of a claim
described in the first sentence of this Section, the use by TSA or its
Sublicensees of the Xxxxxx Software is enjoined, Xxxxxx shall, at its sole
option either (i) replace such parts of the Xxxxxx Software as have been
enjoined (provided that it has substantially the same functions and features as
the part replaced and is replaced at no cost to TSA or is Sublicensees), or (ii)
procure a license for TSA and its Sublicensees to use same at no additional cost
to TSA or its Sublicensees, or (iii) reimburse to TSA 40% of the amounts which
TSA would have to pay Sublicensees under Section 8.2 of Attachment A of Schedule
C.
Notwithstanding the foregoing and subject to Section V.E of this Agreement,
Xxxxxx assumes no obligation or liability for, and TSA will indemnify, defend
and hold Xxxxxx harmless from any and all expenses, damages, costs (including
reasonable attorneys' fees) or losses resulting from any claim or action of
patent infringement, copyright infringement, trade secret violation, trademark
or trade-name infringement or infringement of any other proprietary right
arising from or relating to
(i) the use of the Xxxxxx Software in combination with any other product,
if the use of the Xxxxxx Software alone would not have given rise to such claim,
(ii) Nestor's compliance with TSA's design, specifications, or
instructions,
(iii) any actions or claims of trademark infringement involving any marking
or branding not applied or approved in advance by Xxxxxx,
(iv) any modification of the Xxxxxx Software not made by Xxxxxx (whether or
not approved by Xxxxxx), or
(v) any claim of direct or contributory infringement of any process patent
arising from the use of any Xxxxxx Software if the use of the Xxxxxx Software in
accordance with its documentation would not have given rise to such claim.
This Section IV.A states the entire liability and obligation of Xxxxxx and
TSA and the exclusive remedy of TSA and its Sublicensees with respect to any
actions or claims of alleged infringement relating to or arising out of the
subject matter of this Agreement.
B. TSA shall promptly notify Xxxxxx (with full particulars) of any possible
infringers or unauthorized users of the Xxxxxx Software of which TSA obtains
knowledge. Xxxxxx, in its sole discretion, shall determine what steps, if any,
are to be taken with respect to any infringement or unauthorized use of the
Xxxxxx Software and any damages recovered shall he payable solely to Xxxxxx. TSA
agrees to fully cooperate with Xxxxxx, at no cost to Xxxxxx (except for
reasonable out-of-pocket expenses), in all stages of any such action. In no
event shall Xxxxxx be obligated hereunder to commence legal proceedings.
V. Warranties and Covenants.
A. Each Party does hereby warrant that this Agreement has been duly and validly
authorized and executed by it and is its valid and binding obligation and that
it has the legal right and authority to execute this Agreement and to conduct
its activities as contemplated by this Agreement.
X. Xxxxxx warrants that no claim has been made by any third party that the
Xxxxxx Software infringes any United States issued patent, trade secret or
copyright of any such third party. Xxxxxx warrants that it knows of no claim by
any third party that the Xxxxxx Software infringes any foreign patent, copyright
or trade secret of such third party.
X. Xxxxxx warrants that, for a period of ninety (90) days after each
installation, the Xxxxxx Software shall substantially conform to the document
titled, Prism Functional Description, which is annexed hereto as Schedule C
solely for the purpose of listing such functions; provided, however, that such
warranty shall be voided in its entirety with respect to any Xxxxxx Software to
which TSA shall have made any functional modification without Nestor's approval
or to any Xxxxxx Software which shall have been installed in a manner not in
accordance with a mutually agreeable installation guide.
D. EXCEPT AS PROVIDED IN B, C AND F OF THIS SECTION V, THE XXXXXX SOFTWARE IS
LICENSED AS-IS. XXXXXX DOES NOT WARRANT THAT THE XXXXXX SOFTWARE AND THE
TECHNOLOGY EMBODIED THEREIN ARE CAPABLE OF INDUSTRIAL REALIZATION OR COMMERCIAL
EXPLOITATION, THE RISKS OF WHICH ARE BEING ASSUMED SOLELY BY TSA, AND XXXXXX
SHALL HAVE NO RESPONSIBILITY FOR THE CONSEQUENCES OF ANY SUCH FAILURE OF
INDUSTRIAL REALIZATION OR COMMERCIAL EXPLOITATION. IT IS UNDERSTOOD THAT XXXXXX
IS NOT MAKING AND EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES THAT THE
MANUFACTURE, USE, SUBLICENSING OR SALE OF THE XXXXXX SOFTWARE WILL NOT INFRINGE
THE PATENTS, COPYRIGHTS, TRADEMARKS OR OTHER PROPRIETRAY RIGHTS OF ANY THIRD
PARTY.
E. EXCEPT AS PROVIDED IN B, C AND F OF THIS SECTION V, XXXXXX EXPRESSLY
DISCLAIMS ANY AND ALL WARRANTIES OR GUARANTEES OF ANY KIND WHATSOEVER, EITHER
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
F. REGARDLESS OF WHETHER ANY REMEDY HEREIN FAILS OF ITS ESSENTIAL PURPOSE, IN NO
EVENT WILL XXXXXX BE LIABLE FOR ANY INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE,
INDIRECT OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATING IN ANY WAY TO THIS
AGREEMENT, THE XXXXXX SOFTWARE OR THE USE OF THE SAME (INCLUDING, WITHOUT
LIMITATION, DAMAGES FOR LOST INFORMATION, LOST SAVINGS, LOST PROFITS OR BUSINESS
INTERRUPTION), EVEN IF XXXXXX HAS BEEN INFORMED, IS AWARE, OR SHOULD BE OR
SHOULD HAVE BEEN AWARE, OF THE POSSIBILITY OF SUCH DAMAGES. NOTHING CONTAINED IN
THIS SUBSECTION F IS INTENDED TO LIMIT NESTOR'S OBLIGATIONS UNDER SECTIONS IV.A.
THE SOLE REMEDY FOR ANY DISK OR OTHER, MACHINE READABLE MATERIAL SUPPLIED
BY XXXXXX WHICH IS PHYSICALLY DEFECTIVE SHALL BE, AT NESTOR'S OPTION,
REPLACEMENT OF SUCH DISK OR MATERIAL OR REFUND OF THE ROYALTY PAID TO XXXXXX
RELATING TO SUCH DISK OR MATERIAL.
EXCEPT FOR INDEMNIFICATION OF TSA BY XXXXXX PURSUANT TO SECTION IV A, IN NO
EVENT WILL XXXXXX BE LIABLE IN DAMAGES OR OTHERWISE IN EXCESS OF THE ROYALTIES
RECEIVED BY XXXXXX FROM TSA HEREUNDER.
EXCEPT FOR BREACHES OF THIS AGREEMENT AFFECTING NESTOR'S INTELLECTUAL
PROPERTY RIGHTS (INCLUDING BUT NOT LIMITED TO BREACHES OF SECTIONS I, II, V. F.
(1) AND (2) AND (4), AND VII OF THIS AGREEMENT) AND REGARDLESS OF WHETHER ANY
REMEDY HEREIN FAILS OF ITS ESSENTIAL PURPOSE, IN NO EVENT WILL TSA BE LIABLE FOR
ANY INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES
ARISING OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT, THE XXXXXX SOFTWARE OR
THE USE OF THE SAME (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOST
INFORMATION, LOST SAVINGS, LOST PROFITS OR BUSINESS INTERRUPTION), EVEN IF TSA
HAS BEEN INFORMED, IS AWARE, OR SHOULD BE OR SHOULD HAVE BEEN AWARE, OF THE
POSSIBILITY OF SUCH DAMAGES.
G. TSA further agrees that:
(1) it will not use, market, sublicense, deliver or transfer in any way the
Xxxxxx Software in violation of any applicable law, rule or regulation of the
United States, or any State of the United States or any foreign country of
applicable jurisdiction (including without limitation any United States law,
rule or regulation relating to technology export or transfer) and it will obtain
at its own cost any required export licenses; provided Xxxxxx will provide all
reasonable cooperation in TSA's efforts to obtain such export license and if
such license is used by Xxxxxx with other licensees Xxxxxx will reimburse TSA a
pro-rata amount of TSA's costs for such license.
(2) it will not accept any purchase order or contract (including without
limitation any United States or foreign government contract) that by its terms
or by the operation of law will abridge or otherwise diminish Nestor's
intellectual-property rights in and/or to the Xxxxxx Software (and all such
orders or contracts with-any government agency will include "restricted" or
"limited" rights provisions, or their equivalents, or be on no less favorable
terms to Xxxxxx);
(3) this Agreement is a license agreement only, not an agreement for the
sale of the Xxxxxx Software, and neither TSA nor any Sublicensee obtains any
right in or to the Xxxxxx Software other than as provided in this Agreement or
the sublicenses.
(4) TSA shall not infringe the copyright or other propriety rights in the
Xxxxxx Software nor permit others within TSA's control (including Distributors)
to do so.
(5) it will be solely responsible and liable for all necessary or desirable
steps to market and (subject to Nestor's providing the engineering and
consulting support set forth in Section VIII.A), to adequately support and
maintain, the Xxxxxx Software.
(6) As between TSA and its Sublicensees TSA is solely responsible for
warranting the Xxxxxx Software and liable for any warranty claims therefor
(either express, implied or otherwise);and
(7) it is solely responsible for all expenses incurred by it in its
performance of this Agreement.
(8) As between TSA and Xxxxxx, TSA assumes all responsibility and liability
of the selection of the Xxxxxx Software to achieve the results intended and for
the use of and results obtained from the Xxxxxx Software.
VI. Term, Extension, Expiration or Termination.
A. This Agreement shall be effective as of the date set forth on page 1 and
shall continue thereafter for a term of ten (10) years.
B. TSA may at its option, extend the term of this Agreement for successive
one-year terms up to a maximum of twenty one-year terms if either
(i) TSA shall have paid to Xxxxxx during the calendar year immediately
preceding such extension Earned Royalties of not less than two million dollars
($2,000,000) or
(ii) TSA owns, at the end of such calendar year, not less than ten per cent
of the then issued and outstanding shares of Xxxxxx or
(iii) TSA chooses to and does pay the difference between the Earned
Royalties paid during such calendar year of this Agreement and $2,000,000.
C. Either Party may terminate this Agreement and the License by written notice
to the other Party, if such other Party shall breach any of the provisions of
this Agreement and such breach continues for at least thirty (30) days after
notice thereof. TSA may terminate this Agreement and the License by delivering
to Xxxxxx one hundred eighty (l80) days advance written notice thereof.
D. Notwithstanding the foregoing, this Agreement shall immediately terminate if
TSA liquidates, dissolves, shall be adjudicated insolvent, files or has filed
against it a petition in bankruptcy or for reorganization which, if filed
against TSA, has not been discharged within one hundred and eighty (180) days of
filing, takes advantage of any insolvency act or proceeding, including an
assignment for the benefit of creditors, or commits any other act of bankruptcy;
provided, however, that Xxxxxx shall only have the right to suspend the License
and Nestor's performance of its obligations under this Agreement during the
pendency of any undischarged involuntary bankruptcy or reorganization.
E. Notwithstanding any termination or expiration of this Agreement, the License
and any Sublicenses shall continue in effect with respect to any Xxxxxx Software
sublicensed by TSA prior to termination or expiration. In addition, TSA shall
remain liable for all amounts which have accrued but not been paid as of the
date of termination.
In the event of termination of this Agreement for breach, all future
payments by Sublicensees that constitute part of the Earned Royalty Base shall
inure to the benefit, and be payable to the account of, the non-breaching Party.
In the event of termination of this Agreement by TSA for breach, TSA shall
pay to Xxxxxx during the remaining term of the respective Sublicensees, for each
Sublicense then in effect, the greater of (i) the maintenance fee provided for
in the Sublicense or (ii) an annual amount equal to fifteen percent (15%) of the
Initial License Fees set forth in such Sublicense.
In addition thereto, TSA shall pay to Xxxxxx any out-of-pocket costs of
Xxxxxx in connection with maintenance-related travel to Sublicensee sites.
In consideration of such fees and reimbursed costs, Xxxxxx will provide to
Sublicensees during the lesser of (i)the remaining term of the Sublicense in
question, or (ii) five (5) years from the date of termination or expiration of
this Agreement, the maintenance support set forth in Section VIII A of this
Agreement.
Termination or expiration of this Agreement and the License will not
release TSA from any of its obligations or liabilities accrued or incurred under
this Agreement, or rescind or give rise to any right to rescind any payment made
or other consideration given hereunder.
Upon termination or expiration of this Agreement and the License, TSA shall
cease all marketing and other activities under the License and shall (i) at
Nestor's election, immediately deliver to Xxxxxx or irretrievably destroy, or
cause to be delivered or destroyed, any and all Copies of the Xxxxxx Software in
whatever form and any written or other materials relating to the Xxxxxx Software
in TSA's possession, custody or control, and (ii) within thirty (30) days,
deliver to Xxxxxx a certification thereof; provided if Xxxxxx decides not to
assume an assignment of all sublicenses TSA may retain a copy of the Xxxxxx
Software solely for the purposes of maintenance and support.
VII. Confidentiality.
TSA acknowledges that (i) the data and information relating to the
functioning of the Xxxxxx Software, and (ii) any other information that is
marked "Confidential" (in either case, whether oral, written or in
machine-readable form) disclosed to TSA by Xxxxxx pursuant to the provisions of
this Agreement (collectively, the "Xxxxxx Technology") contain valuable trade
secrets and other proprietary information of Xxxxxx, that unauthorized use or
disclosure of such Xxxxxx Technology would irreparably injure Xxxxxx, which
injury cannot be remedied solely by the payment of money damages. TSA shall hold
in strict confidence and not disclose, reproduce or use the Xxxxxx Technology
with the exception of information which:
(i) is already in the public domain at the time of disclosure; or (ii)
after disclosure becomes a part of the public domain by publication other than
by TSA in violation of this Agreement; or (iii) is received by TSA from a third
party who did not require such information to be held in confidence and who did
not acquire, directly or indirectly through one or more intermediaries, such
information from Xxxxxx under any obligation of confidence; or (iv) is agreed to
by Xxxxxx in this Agreement or otherwise in writing in advance of such use,
publication or reproduction or (v) if required by law pursuant to a governmental
or judicial mandate, provided TSA shall have given Xxxxxx prompt notice of such
mandate and provided further that TSA shall have taken no action to prevent or
interfere with efforts Xxxxxx may take to intervene in any such proceeding or
otherwise to prevent such disclosure; or (vi) as necessary to enforce TSA's
rights and Nestor's obligations under this Agreement; provided TSA shall have
given Xxxxxx prompt notice of such planned disclosure and have given Xxxxxx an
opportunity to seek in any such proceeding or otherwise a protective order with
respect to such disclosure.
Unless prohibited by another provision of this Agreement, TSA may disclose
the Xxxxxx Technology only to its employees, consultants and to Distributors and
their respective employees, provided the entity to whom a disclosure is made (i)
needs to know same in order to effectuate the purposes of this Agreement, and
(ii) has entered into a confidentiality agreement substantially equivalent to
the foregoing provisions of this Section VII A.
TSA agrees to cooperate fully with Xxxxxx, at no cost to Xxxxxx (except for
reasonable out-of-pocket expenses), in any action or proceeding whereby Xxxxxx
seeks to prevent or restrain any unauthorized use of the Xxxxxx Technology or to
seek damages therefor.
B. TSA shall not disclose to Xxxxxx any information that TSA considers to be
confidential without first have received Nestor's consent to receive such
disclosure. Any confidential information accepted by Xxxxxx pursuant to such
consent shall be held in confidence under the same terms and conditions as those
applicable to TSA as set forth in subsection A of this Section VII. Xxxxxx shall
promptly return, and not retain any copies of, any TSA information marked
"confidential" which it does not agree to hold in such confidence.
Xxxxxx acknowledges that the information to be delivered to it pursuant to
Section III D of this Agreement shall be deemed to be confidential.
C. All of the provisions of this Section VII shall survive any termination or
expiration of this Agreement or License.
VIII. Consulting, Training And Other Services; Enhancements and Upgrades.
A. During the term of this Agreement, and provided that TSA is then in full
compliance with all of the terms and conditions of this Agreement (except for
breaches which have been fully and timely cured), Xxxxxx shall provide to TSA
such commercially reasonable maintenance support services related to the use of
the Xxxxxx Software as are described in pages 3 and 4 of the Xxxxxx document
titled PRISM Software and Client Support (excluding the Installation Program
described therein), a specimen of which is attached to this Agreement as
Schedule E.
In addition, provided (i) all error fixes and upgrades then previously
provided by Xxxxxx have been installed; (ii) the Xxxxxx Software is operated
properly in accordance with any applicable manuals and other instructions and
(iii) the hardware and software which is directly or indirectly connected or
interconnected with the Xxxxxx Software complies at all times with a support
obligation no less favorable to the user than the provisions of this paragraph,
then support services will include modifications as necessary to ensure that all
Xxxxxx Software licensed by TSA and delivered to Sublicensees is Year 2000
Compliant. "Year 2000 Compliant" shall mean the ability of the software to
process calendar days falling on or after January 1, 2000 in the same manner as
it does for calendar dates before such date.
B. Such other services shall be done by Xxxxxx only upon Nestor's acceptance, in
its sole discretion, of a written request from TSA, which request shall be in
the form of a work order setting forth the work being requested, the identity
and location of the relevant Sublicensee, and the requested installation or
delivery date. Upon acceptance of any such work order, Xxxxxx shall furnish a
quotation, and such quotation shall remain in effect for ninety (90) days from
its date. The Parties expressly acknowledge and agree that TSA shall be
permitted to discount Nestor's quotation up to a maximum discount of ten per
cent (10%) without the prior written consent of Xxxxxx.
Except as provided in the Schedule, fees attributable to installation,
consulting, and/or customization services shall be retained by the Party
performing such services and shall not be subject to any Earned Royalty.
C. In consideration of such services, TSA shall pay to Xxxxxx for all services
rendered pursuant to this Section VIII.B engineering fees at the rates set forth
in the Schedule. The rates shall remain in effect for one year following the
date of execution of this Agreement and thereafter shall be adjusted as set
forth in the Schedule.
TSA shall also reimburse to Xxxxxx Xxxxxx'x reasonable travel expenses
incurred in providing any services under this Section VIII. All services
provided by Xxxxxx pursuant to Section VIII shall be provided to TSA, not to
TSA's customers.
X. Xxxxxx shall deliver to TSA all enhancements and upgrades to the Xxxxxx
Software that it makes generally available at no charge to other licensees of
PRISM, other than enhancements or upgrades which Xxxxxx is prohibited to offer
by statute or applicable precedent. Xxxxxx shall give TSA notice of the
scheduling releases no later than such notice is given generally to other
licensees of PRISM. Such enhancements and upgrades shall be subject to all of
the terms and conditions of this Agreement.
E. All payments due under this Section VIII shall be due thirty (30) days after
the end of the month in which the services or expenses to which they relate were
rendered or incurred. Payments for partial staff weeks or staff months shall be
prorated. If and to the extent Xxxxxx delivers to TSA any software as part of
such activities, such software shall be subject to all of the terms and
conditions of the License and this Agreement.
IX. Source-Code Escrow
Within 30 days after execution of this Agreement Xxxxxx shall deliver to
the escrow agent a copy of the source code of the Xxxxxx Software, per the terms
of the escrow agreement attached hereto as Exhibit A. Such escrow agreement
provides that the source code shall be delivered out of escrow to TSA only if
Xxxxxx
(i) files for a liquidating bankruptcy or
(ii) is otherwise liquidated and is, or its successor in interest is, and
will continue to be, unable to furnish to TSA the technical support contemplated
by this Agreement or
(iii) Xxxxxx does not materially provide the technical support contemplated
by this Agreement and continues not to supply such technical support for twenty
days after notice by TSA of its failure to supply such technical support.
Any source code delivered out of escrow to TSA shall be used by TSA solely
to maintain and enhance the Xxxxxx Software delivered to Sublicensees, and shall
be subject to the provisions of Section VII of this Agreement. Notwithstanding
the foregoing, TSA shall be permitted to deliver to any Sublicensee such source
code delivered out of escrow as shall be necessary to permit such Sublicensee to
maintain the Xxxxxx Software or to update or to modify existing scoring models
or to create new scoring models, in the event the source code is released to
sublicensees under 2.7 of the Attachment set forth in Schedule C.
Other than TSA's right to terminate this Agreement per Section VI.B for
breach, and a potential refund under III.A, TSA's right to obtain source code
shall constitute TSA's exclusive remedy and Nestor's exclusive liability for the
failure of Xxxxxx or any successor to Xxxxxx to provide the technical support
contemplated by this Agreement. All expenses relating to such escrow arrangement
shall be borne by Xxxxxx.
X. Miscellaneous
A. TSA will cause any and all of the Xxxxxx Software and all advertising or
other marketing material of any kind, documentation and packaging therefor to be
marked and labeled with and/or reference Nestor's patent rights, copyrights,
and/or trade names in the form and style furnished by Xxxxxx to TSA. TSA shall
not otherwise use or make reference to such rights, marks or names of Xxxxxx
without the advance written permission of Xxxxxx. Xxxxxx may, at any time and
from time to time, in its sole discretion, alter or revoke its instructions
pursuant hereto; provided, however, that TSA shall be permitted to use then
existing stocks of documentation and advertising materials unless, in the
opinion of counsel to Xxxxxx, such use would be legally inadvisable, in which
case Xxxxxx shall reimburse TSA for the cost of the existing materials.
B. Neither this Agreement, the License or other interest hereunder shall be
assignable by either party.
C. The headings and captions used in this Agreement are for convenience only and
are not to be used in the interpretation of this Agreement.
D. The failure of either Party to require performance of any provision of this
Agreement shall not affect the right to subsequently require the performance of
such or any other provision of this Agreement. The waiver of either Party of a
breach of any provision shall not be taken or held to be a waiver of any
subsequent breach of that provision or any subsequent breach of any other
provision of this Agreement.
E. The Parties are independent contractors and engage in the operation of their
own respective businesses. Neither Party is the agent or employee of the other
Party for any purpose whatsoever. Nothing in this Agreement shall be construed
to establish a relationship of co-partners or joint venturers between the two
Parties. Neither Party has the authority to enter into any contract or assume
any obligation for the other Party or to make any warranty or representation on
behalf of the other Party.
F. If any provision of this Agreement is, or is determined to be, invalid,
illegal or unenforceable, all remaining provisions of this Agreement shall
nevertheless remain in full force and effect. Should any provision of this
Agreement be found or held to be invalid, illegal or unenforceable, in whole or
in part, such provision shall be deemed amended to render it enforceable in
accordance with the spirit and intent of this Agreement.
G. This Agreement has been entered into, delivered, and is to be governed by,
construed, interpreted and enforced in accordance with the laws of the State of
New York (without giving reference to choice of law provisions) from time to
time in effect. The Parties agree that the United Nations Convention on
Contracts for the International Sale of Goods shall not apply to any of the
transactions which are contemplated by this Agreement.
H. If a dispute arises out of or relates to this Agreement, the License, a
breach thereof or TSA's use of the Xxxxxx Software, and if said dispute cannot
be settled through direct discussions, the Parties agree to first endeavor to
settle the dispute in an amicable manner by mediation in New York, New York
administered by the American Arbitration Association under its' Commercial
Mediation Rules. Thereafter, any unresolved controversy or claim arising out of
or relating to this Agreement, the License, a breach thereof or TSA's use of the
Xxxxxx Software, shall be settled by arbitration before three neutral
arbitrators (selected from a panel of persons having experience with and
knowledge of computers and the computer business, at least one of whom shall be
an attorney) in administered by the American Arbitration Association in
accordance with its Commercial Arbitration Rules. Such arbitration shall be
located in New York, New York if commenced by TSA, and in Chicago, Illinois if
commenced by Xxxxxx. Any provisional or equitable remedy which would be
available from a court of law shall be available from the arbitrators to the
Parties. In any such proceeding limited civil discovery shall be permitted for
the production of documents, which shall be governed by the Federal Rules of
Civil Procedure --(without reference to any local rules of a particular court).
All issues regarding discovery requests shall be decided by the arbitrators.
Judgment upon the award of the arbitrators may be enforced in any court having
jurisdiction thereof. The prevailing party shall be entitled to reasonable
attorney's fees. The Parties hereby consent to the non-exclusive jurisdiction of
the courts of the State of New York or to any Federal Court located within the
State of New York for any action (i) to compel arbitration, (ii) to enforce the
award of the arbitrators or (iii) at any time prior to the qualification and
appointment of the arbitrators, for temporary, interim or provisional equitable
remedies and to service of process in any such action by registered mail, return
receipt requested, or by any other means provided by law.
I. This Agreement contains the entire and exclusive agreement of the Parties
with respect to its subject matter. This Agreement replaces an agreement between
the Parties dated September 19, 1996 and amended April 18, 1997 and January 14,
1998 (the "Original Agreement"). The Parties rights and obligations under the
Original Agreement continue through the date of this Agreement; thereafter the
Parties rights and obligations are governed by this Agreement.
Except as otherwise provided in the previous sentence, this Agreement supersedes
any agreements and understandings, whether written or oral, entered into by the
Parties prior to its effective date and relating to its subject matter. No
modification or amendment of this Agreement shall be effective unless it is
stated in writing, specifically refers hereto and is executed on behalf of each
Party.
J. Except as otherwise specified, all notices, payments, certificates and
reports hereunder shall be deemed given and in effect as of the date of mailing,
when sent by express mail (or other overnight delivery service), postage
prepaid, addressed to the Parties as set forth in the preamble to this Agreement
directed in each case to the President of the Party receiving the notice (and if
to TSA, with copy to General Counsel of TSA) or to such other addresses as the
Parties may from time to time give written notice. Each Party shall use its best
efforts to respond expeditiously to requests of the other Party made pursuant to
this Agreement.
K. Except for failure to make any payment when due, neither Party hereto shall
be liable to the other for failure or delay in meeting any obligations hereunder
as the result of strikes, lockouts, war, Acts of God, fire, flood or acts of
government, if beyond the reasonable control of such Party.
L. For a period of one year following the date of this Agreement Xxxxxx shall
provide office space, at no charge, at Nestor's facility for one TSA senior
project management person to assist Xxxxxx with TSA related projects. In
addition, Xxxxxx shall supply customary equipment and support, other than
computer equipment. TSA shall remain responsible for all of the salary and
benefits and other employment obligations of such person.
M. So long as TSA owns not less than ten per cent of the then issued and
outstanding shares of Xxxxxx, Xxxxxx agrees on a "best efforts basis" to devote
a minimum of five full time incremental qualified personnel toward the Xxxxxx
Software specifically related to TSA's needs. Such needs include, but are not
limited to, modeling and engineering (these personnel do not need to be new
hires).
IN WITNESS WHEREOF, the Parties hereto have set their hands by their duly
authorized representatives as of the day and year first above written.
TRANSACTION SYSTEMS ARCHITECTS, INC. XXXXXX, INC.
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxxxx X. Xxxxxx Name: Xxxxx Xxxxxxx
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Title: Chief Executive Officer Title: Chief Financial Officer
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