EXHIBIT 10.8
TOPTIER, ISRAEL, LTD. - BAAN DEVELOPMENT B.V.
RESELLER AGREEMENT
This RESELLER AGREEMENT (this "Agreement") is entered into as of
March 25, 2000 (the "Effective Date") by and between Baan Development B.V., a
Dutch corporation, with a principal place of business at Baron van Xxxxxxxxxxxx
00, 0000 XX Xxxxxxxxx, Xxx Xxxxxxxxxxx ("Baan") and TopTier, Israel, Ltd., an
Israel corporation, whose registered office and place of business are at #0
Xxxxxxxxxxx Xxxxxx, Xx'xxxxx, Xxxxxx ("TopTier").
RECITALS
WHEREAS, Baan and TopTier entered into an OEM License Agreement dated
as of January 1, 2000 whereby Baan will license under its own brand name certain
TopTier software and technology (the "License Agreement"); and
WHEREAS, TopTier designs, develops and markets certain other
proprietary software and technology and is willing to grant Baan a license to
resell those TopTier Products, Additional Products and Baan Branded Products (as
defined below) to End Users;
WHEREAS, the Parties desire to set forth the terms and conditions under
which the foregoing shall take place; and
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, the parties mutually agree as follows:
1. DEFINITIONS
As used throughout this Agreement, the following terms shall have the
meanings set forth below unless otherwise indicated:
1.1. "ADDITIONAL PRODUCTS" means proprietary software products of
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TopTier listed in EXHIBIT C-1, which may be supplemented from time to time by
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TopTier.
1.2. "AGREEMENT" means the terms and conditions contained herein, in
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all attached Exhibits, Addenda and any other documents made a part of this
Agreement or incorporated by reference, including any written amendments hereto
signed by the Parties.
1.3. "AFFILIATE" means any and all of the Baan entities listed in
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Exhibit A, which may be updated by Baan from time to time.
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1.4. "BAAN BRANDED PRODUCTS" means proprietary software products of
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TopTier listed in EXHIBIT B that are marketed under the Baan brand, which may be
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supplemented by TopTier from time to time.
Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as *. A complete version of this exhibit has been filed
separately with the Securities and Exchange Commission.
1.5. "BANKRUPTCY EVENT" means any of the following events or circumstances
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with respect to a Party: (i) such Party ceases conducting its business in the
normal course; (ii) becomes insolvent or becomes unable to meet its obligations
as they become due; (iii) makes a general assignment for the benefit of its
creditors; (iv) petitions, applies for, or suffers or permits with or without
its consent the appointment of a custodian, receiver, trustee in bankruptcy or
similar officer for all or any substantial part of its business or assets; or
(v) avails itself or becomes subject to any proceeding under the U.S. Bankruptcy
Code or any similar state, federal or foreign statute relating to bankruptcy,
insolvency, reorganization, receivership, arrangement, adjustment of debts,
dissolution or liquidation, which proceeding is not dismissed within sixty (60)
days of commencement thereof.
1.6. "CONFIDENTIAL INFORMATION" means information, including without
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limitation the Licensed Software and Technology, that is transmitted or
otherwise provided by or on behalf of either Party to the other Party in
connection with this Agreement and the activities hereunder, and that should
reasonably have been understood by the receiving Party because of legends or
other markings, the circumstances of disclosure or the nature of the information
itself, to be proprietary and confidential to the disclosing Party, an Affiliate
of the disclosing Party or to a third party. Confidential Information may be
disclosed in written or other tangible form (including on magnetic media) or by
oral, visual or other means.
1.7. "DERIVATIVE WORK" has the meaning ascribed to it under the United
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States Copyright Law, Title 17 U.S.C. Sec. 101 et. seq.
1.8. "DOCUMENTATION" means all or any portion of the materials, in written
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or other tangible form (including on magnetic media), generally made available
for use in connection with the Baan Branded Products, the Additional Products or
the TopTier Products, as the case may be, including functional or technical
specifications, user guides, operator guides, installation and operation guides
and any other supporting materials.
1.9. "END USER" shall mean the end user of the Baan Branded Products,
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Additional Products or the TopTier Products, as the case may be. If End User is
a corporation or other entity, then End User means each individual within such
corporation or entity licensed pursuant to this Agreement to use, but not to
further distribute, the Baan Branded Products, Additional Products or the
TopTier Products, as the case may be.
1.10. "ENHANCEMENT" means any improvement, upgrade, new version of,
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enhancement to, fix, extension to, or add-on module of the Baan Branded
Products, Additional Products or the TopTier Products identified in EXHIBIT B,
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EXHIBIT C OR EXHIBIT C-1.
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1.11. "INTELLECTUAL PROPERTY RIGHTS" means all rights of a Person in, to,
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or arising out of: (i) any U.S., international or foreign patent or any
application therefor and any and all reissues, divisions, continuations,
renewals, extensions and continuations-in-part thereof; (ii) inventions (whether
patentable or not in any country), invention disclosures, improvements, trade
secrets, proprietary information, know-how, technology and technical data; (iii)
copyrights, copyright registrations, mask works, mask work registrations, and
applications therefor in the U.S. or any foreign country, and all other rights
corresponding thereto throughout the world; and (iv) any other proprietary
rights in technology anywhere in the world.
1.12. "MAINTENANCE AND SUPPORT" means the maintenance and support
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activities described in the attached EXHIBIT D.
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1.13. "OBJECT CODE" means Software in binary, executable form.
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1.14. "PARTY" in its singular or plural form, refers to either Baan or
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TopTier or both, as dictated by the use.
1.15. "PERSON" means any legal person or entity, including any individual,
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corporation, partnership, joint venture, association, joint stock company,
trust, unincorporated association, limited liability corporation, governmental
entity, or other person or entity of similar nature.
1.16. "SOFTWARE" means computer software and Object Code, including, but
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not limited to, assemblers, compilers, or other executable code including
associated data files, data (including image and sound data), design tools, user
interfaces, templates, menus, buttons and icons, together with all related
Documentation.
1.17. "SOURCE CODE" means Software in human-readable form, including high-
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level language program listings, flowcharts, schematics, and logic diagrams and
associated Documentation.
1.18. "TERM" shall have the meaning set forth in Section 11.1.
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1.19. "TOPTIER PRODUCTS" means the proprietary software products of
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TopTier listed in EXHIBIT C, which may be supplemented by TopTier from time to
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time.
2. LICENSE
2.1. LICENSE TO BAAN. In consideration of the fees to be paid pursuant to
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Section 3 below, TopTier hereby grants to Baan and its Affiliates a non-
exclusive, limited, worldwide right and license to market, distribute,
sublicense and otherwise resell the Baan Branded Products, the Additional
Products and the TopTier Products to End-Users during the Term of this
Agreement. Baan shall sublicense the Baan Branded Products, the Additional
Products and the TopTier Products to End Users pursuant to a third party
addendum to its own Software License and Support Agreement according to terms
and conditions to be approved by TopTier. Baan may only resell the Additional
Products and the TopTier Products to End Users in conjunction with the sale of
Baan Branded Products to such End Users or following the sale of Baan Branded
Products to such End Users.
2.2. NAMED USERS. Baan may resell the Baan Branded Products, the
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Additional Products and the TopTier Products to End Users on a named user basis.
3. LICENSE FEES AND PAYMENTS
3.1. ROYALTIES. Each Party agrees to pay the other royalties
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("Royalties") according to the following rules, based on Net Sales by a Party of
the Baan Branded Products, the Additional Products or the TopTier Products, as
the case may be. The term "Net Sales" means the gross revenue received by a
Party from the license of the Baan Branded Products, the Additional Products or
the TopTier Products, as the case may be, less the following items: (i) import,
export, value added, excise and sales taxes, tariffs, and custom duties; (ii)
credit for returns, damaged goods, allowances, or trades; (iii) charges for
packaging, shipping and insurance; and (iv) customary rebates, cash and trade
discounts, actually taken.
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3.2. ROYALTIES FOR LICENSES OF TOPTIER PRODUCTS (JOINT SELLING). Where
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representatives from Baan and TopTier jointly participate in selling TopTier
Products to End Users, the Net Sales [*], and the Party receiving the proceeds
of the Net Sales from the End User shall retain its share and [*] of the Net
Sales to the other Party.
3.3. ROYALTIES FOR LICENSES OF TOPTIER PRODUCTS (BAAN SELLING). Where
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representatives from Baan are the sole participants in selling the TopTier
Products to End Users, the Net Sales shall be split [*] and Baan shall retain
its share and remit the remaining percentage of the Net Sales to TopTier.
3.4. ROYALTIES FOR LICENSES OF TOPTIER PRODUCTS (TOPTIER SELLING). Where
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representatives from TopTier are the sole participants in selling the TopTier
Products to End Users that have already purchased Baan Branded Products, the Net
Sales shall be split [*], and TopTier shall retain its share and remit the
remaining percentage of the Net Sales to Baan.
3.5. ROYALTIES FOR LICENSES OF BAAN BRANDED PRODUCTS (TOPTIER SELLING).
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Where representatives from TopTier are the sole participants in selling the Baan
Branded Products to End Users, the Net Sales shall be split [*] and TopTier
shall retain its share and remit the remaining percentage of the Net Sales to
Baan.
3.6. ROYALTIES FOR LICENSES OF BAAN BRANDED PRODUCTS (BAAN SELLING). Where
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representatives from Baan are the sole participants in selling the Baan Branded
Products to End Users, the Net Sales shall be split [*], and Baan shall retain
its share and remit the remaining percentage of the Net Sales to TopTier.
3.7. ROYALITES FOR LICENSES OF BAAN BRANDED PRODUCTS (JOINT SELLING).
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Where representatives from Baan and TopTier jointly participate in selling Baan
Branded Products to End Users, the Net Sales shall be split [*], and the Party
receiving the proceeds of the Net Sales from the End User shall retain its share
and remit [*] of the Net Sales to the other Party.
3.8. ROYALITES FOR LICENSES OF ADDITIONAL PRODUCTS (JOINT SELLING). Where
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representatives from Baan and TopTier jointly participate in selling the
Additional Products to End Users, the Net Sales shall be split [*], and the
Party receiving the proceeds of the Net Sales from the End User shall retain its
share and remit the remaining percentage of the Net Sales to the other Party.
3.9. [*]
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3.10. ROYALTIES FOR LICENSES OF ADDITIONAL PRODUCTS (BAAN SELLING). Where
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representatives from Baan are the sole participants in selling the Additional
Products to an End User as permitted by Section 2.1, the Net Sales shall be
split [*] and Baan shall retain its share and remit the remaining percentage of
the Net Sales to TopTier.
3.11. REPORTS AND PAYMENT OF ROYALTIES.
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3.11.1. Within thirty (30) days after the end of each calendar
quarter, each Party shall report to the other (i) the names of End Users
licensing the TopTier Products, the Additional Products or the Baan Products, as
the case may be; (ii) the gross amount received for the TopTier Products, the
Additional Products or the Baan Products, as the case may be, from such End
Users and the amount of Net Sales derived therefrom during such calendar quarter
and (iii) the aggregate Royalties, including the calculation thereof, owing
thereon. Each Party shall, contemporaneously with the sending of such report,
wire to a bank and an account named by the other Party the amount of Royalties
due such Party hereunder for such quarter.
3.11.2. During the first year following the Effective Date, if the
total Royalties received by TopTier for licenses of the Baan Branded Products,
the Additional Products and the TopTier Products sold by either Party as
required under Section 3 are less than [*] per quarter, then TopTier shall
invoice Baan and Baan shall remit to TopTier the difference between [*] and the
amount of Royalties actually received by TopTier in the quarter such that
TopTier shall have received a total of [*] in Royalties at the end of the first
year following the Effective Date.
3.11.3. In respect of the payment for the first quarter of the
first year following the Effective Date as described in Section 3.8.2, Baan
shall remit to TopTier the difference between [*] and the amount of Royalties
actually received by TopTier in the first quarter, and such payment will be
nonrefundable and irrevocable.
3.12. AUDIT RIGHTS. Each Party shall make and maintain until the
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expiration of three (3) years after the last payment under this Agreement is
due, complete books, records and accounts regarding its distribution activities
of the relevant products in order to calculate and confirm its Royalty
obligations hereunder. Upon reasonable prior notice, each Party shall have the
right, exercisable not more than once every twelve (12) months, to appoint an
independent auditor which auditor shall be permitted to examine such books,
records and accounts during the audited Party's normal business hours to verify
reports and payments provided pursuant to this Section 3 hereof. If any such
examination discloses a shortfall in payment of Royalties, such amounts shall
immediately be paid.
4. MARKETING DEVELOPMENT FUNDS PROGRAM
4.1. PROGRAM SUMMARY. As a special incentive for Baan and in recognition
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of the contribution which Baan has made and will continue to make in promoting
the recognition of TopTier Products in the marketplace, TopTier will make
certain marketing development funds available to Baan according to this Section
4 during each of the first five years following the Effective Date, as follows
(collectively, the "Marketing Development Funds"):
4.1.1. [*] during the first year following the Effective Date, up
to a maximum of [*] per calendar quarter;
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4.1.2. [*] during each of the second, third and fourth years
following the Effective Date, up to a maximum of [*] per calendar quarter; and
4.1.3. [*] during the fifth year after the Effective Date, up
to a maximum of [*] per calendar quarter.
The Marketing Development Funds will be made available only to the extent of
TopTier's share of Royalties from Joint Sales of the TopTier Products, Baan
Branded Products and from sales of the Additional Products as provided in
Sections 3.2, 3.7 and 3.8 above. Baan will only be eligible to receive Marketing
Development Funds from TopTier so long as the License Agreement remains in
effect and Baan has paid all License and Maintenance Fees then due and owing
thereunder.
4.2. COMPUTATION AND PAYMENT. The Marketing Development Funds will be
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computed quarterly based on the Royalties reported by each Party pursuant to
Section 3.6 above, and will be paid by TopTier to Baan within forty-five (45)
days of the end of each calendar quarter.
5. MAINTENANCE AND SUPPORT
5.1. MAINTENANCE AND SUPPORT FOR TOPTIER PRODUCTS AND THE ADDITIONAL
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PRODUCTS. For End Users that wish to contract for maintenance and support of the
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TopTier Products or the Additional Products directly with Baan, Baan will
provide FPOC (as that term is defined in EXHIBIT D) to End Users and TopTier
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will provide FLS, SLS and TLS (as those terms are defined in EXHIBIT D) to End
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Users. For such occurrence, Baan shall charge End Users an annual fee equal to
[*] of the net license fee received by Baan for the TopTier Products and the
Additional Products (subject to certain minimum prices for the TopTier Products
and the Additional Products identified in EXHIBIT D), and Baan shall remit to
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TopTier [*] of any such support fees collected by Baan, along with the Royalties
to be paid pursuant to Section 3 above.
5.2. MAINTENANCE AND SUPPORT FOR BAAN BRANDED PRODUCTS. For End Users that
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wish to contract for maintenance and support of the Baan Branded Products
directly with Baan, the Parties shall support and maintain the Baan Branded
Products according to Section 5 of the License Agreement.
6. PROPRIETARY RIGHTS
6.1. TOPTIER PRODUCTS, ADDITIONAL PRODUCTS AND BAAN BRANDED PRODUCTS.
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TopTier shall own all right, title and interest in and to all TopTier Products,
Additional Products and Baan Branded Products and any Derivative Works thereof,
including all Intellectual Property Rights therein and thereto.
6.2. TRADEMARK LICENSE. Each Party hereby authorizes the other Party to
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use its current and future trademarks, service marks and trade names
("Trademarks") in marketing programs and materials, for the purpose of promoting
the products and services of each of the Parties, provided that such use is not
derogatory nor detrimental to either Party. Such use of the Trademarks shall be
solely in accordance with the reasonable instructions and then current
guidelines from the Party owning the Trademark in question. The Parties
understand and agree that such guidelines may, from time to time, be revised for
the purpose
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of protecting the standards of quality established for the goods and services
sold under the Trademarks and protecting the owner's rights in the Trademarks.
6.3. TANGIBLE PROPERTY. Unless otherwise agreed to in writing, any tangible
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property, including but not limited to Documentation and equipment or material
of every description furnished by one Party to another hereunder, is and shall
remain the property of the furnishing Party. The Parties shall not use such
property except in performing this Agreement. All such property shall be
returned to furnishing Party upon the earlier of either the furnishing Party's
request, completion or termination of the relevant services or expiration or
termination of this Agreement.
7. REPRESENTATIONS AND WARRANTIES
7.1. REPRESENTATIONS AND WARRANTIES. The Parties make the following
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representations and warranties to each other, as applicable:
7.1.1. ORGANIZATION REPRESENTATIONS; ENFORCEABILITY. Each Party is
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duly organized, validly existing and in good standing in the jurisdiction in
which it is incorporated. The execution and delivery of this Agreement by each
Party and the transactions contemplated hereunder have been duly and validly
authorized by all necessary action on the part of each Party. This Agreement
constitutes a valid and binding obligation of each party enforceable in
accordance with its terms.
7.1.2. NO CONFLICT. The entering into and performance of this
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Agreement by the Parties does not and will not violate, conflict with or result
in a material default under any other contract, agreement, indenture, decree,
judgment, undertaking, conveyance, lien or encumbrance to which each of the
Parties or any of its employees is a party or by which it or any of its property
is or may become subject or bound. Each of the Parties will not grant any rights
under any future agreement, nor will it permit or suffer any lien, obligation or
encumbrances that will conflict with the full enjoyment by each Party of its
rights under this Agreement.
7.1.3. RIGHT TO MAKE FULL GRANT. TopTier represents and warrants to
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Baan that it has and shall have all requisite ownership, rights and licenses to
perform its obligations under this Agreement fully as contemplated hereby, and
to grant to Baan the license rights stipulated herein with respect to the Baan
Branded Products, the Additional Products and the TopTier Products, free and
clear of any and all agreements, liens, adverse claims, encumbrances and
interests of any Person, including, without limitation, TopTier employees,
agents, artists and contractors and such contractors' employees, agents and
artists, who have provided, are providing or shall provide services with respect
to the Baan Branded Products, Additional Products and the TopTier Products.
7.1.4. NONINFRINGEMENT. TopTier represents and warrants to Baan that
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nothing contained in the Baan Branded Products, Additional Products or the
TopTier Products violates or misappropriates any Intellectual Property Right of
any third party. Further, no characteristic of the Baan Branded Products,
Additional Products or TopTier Products does or will cause manufacturing, using,
maintaining or selling Baan products or the Baan Branded Products, Additional
Products or TopTier Products to infringe, violate or misappropriate any
Intellectual Property Right of any third party.
7.1.5. NO HARMFUL CODE OR VIRUSES. TopTier represents and warrants
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to Baan that the TopTier Products, Additional Products and Baan Branded Products
will contain no matter which is injurious to End Users or their property. The
Baan Branded Products, Additional Products and the TopTier Products and the
media upon which the same are delivered to Baan are free from computer
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viruses, booby traps, time bombs or other programming designed to interfere with
the normal functioning of the Baan Branded Products, Additional Products and the
TopTier Products.
7.1.6. PROCESSING OF DATE AND DATE DEPENDENT DATA. TopTier represents
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and warrants to Baan that the TopTier Products, Additional Products and Baan
Branded Products will provide accurate processing of date and date dependent
data (including, but not limited to, calculating, comparing and sequencing
operations) for all dates, including leap years.
7.1.7. PERFORMANCE. TopTier represents and warrants to Baan that the
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Baan Branded Products, Additional Products and the TopTier Products will perform
in substantial accordance with the specifications in the Documentation for such
Baan Branded Products, Additional Products and TopTier Products.
8. CONFIDENTIAL INFORMATION
8.1. TERMS OF AGREEMENT. The terms of this Agreement are the Confidential
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Information of both Parties and shall not be disclosed by either Party in any
manner (including but not limited to news releases, articles, brochures,
advertisements, speeches or other information releases) without the prior
written consent of the other Party.
8.2. LIMITATIONS ON USE AND DISCLOSURE. Each Party receiving Confidential
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Information (the "Recipient") agrees as to any such Confidential Information
that may be disclosed to it by the other Party hereunder (the "Discloser"):
(a) to protect such Confidential Information from disclosure to
others, using the same degree of care used to protect its own confidential
or proprietary information of like importance, but in any case using no
less than a reasonable degree of care. Recipient may disclose Confidential
Information received hereunder to (x) its Affiliates who agree, in advance,
in writing, to be bound by this Agreement, and (y) to its employees and
subcontractors, and its Affiliates' employees and subcontractors, who have
a need to know, for the purpose of this Agreement, and who are bound to
protect the received Confidential Information from unauthorized use and
disclosure under the terms of a written agreement. Confidential Information
shall not otherwise be disclosed to any third party without the prior
written consent of the Person owning such Confidential Information;
(b) to use such Confidential Information only for the purposes of
this Agreement;
(c) not to make copies of any such Confidential Information or any
part thereof except for the purposes of this Agreement; and
(d) to reproduce and maintain on any copies of any Confidential
Information such proprietary legends or notices as are contained in or on
the original or as the owner may otherwise reasonably request.
8.3. EXCEPTIONS. The restrictions of this Section 8 on use and disclosure
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of Confidential Information shall not apply to information that (a) was publicly
known at the time of Discloser's communication thereof to Recipient; (b) becomes
publicly known through no fault of Recipient subsequent to the time of
Discloser's communication thereof to Recipient; (c) was in Recipient's
possession free of any obligation of confidence at the time of Discloser's
communication thereof to
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Recipient; (d) is developed by Recipient independently of and without reference
to any of Discloser's Confidential Information or other information that
Discloser disclosed in confidence to any third party; (e) is rightfully obtained
by Recipient from third parties authorized to make such disclosure without
restriction; or (f) is identified by Discloser as no longer proprietary or
confidential.
8.4. DISCLOSURE PURSUANT TO LEGAL REQUIREMENT. In the event Recipient is
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required by law, regulation or court order to disclose any of Discloser's
Confidential Information, Recipient will promptly notify Discloser in writing
prior to making any such disclosure in order to facilitate Discloser seeking a
protective order or other appropriate remedy from the proper authority.
Recipient agrees to cooperate with Discloser in seeking such order or other
remedy. Recipient further agrees that if Discloser is not successful in
precluding the requesting legal body from requiring the disclosure of the
Confidential Information, it will furnish only that portion of the Confidential
Information which is legally required and will exercise all reasonable efforts
to obtain reliable assurances that confidential treatment will be accorded the
Confidential Information.
8.5. RETURN OF CONFIDENTIAL INFORMATION. All Confidential Information
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disclosed under this Agreement (including information in computer software or
held in electronic storage media) shall be and remain the property of Discloser.
All such information in any computer memory or data storage apparatus shall be
erased or destroyed and all such information in tangible form shall be returned
to Discloser, promptly upon the earlier of: (i) the written request of the
Discloser, or (ii) termination or expiration of this Agreement, and shall not
thereafter be retained in any form by Recipient.
8.6. EQUITABLE RELIEF. The Parties acknowledge that their respective
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Confidential Information are unique and valuable, and that breach by either
Party of the obligations of this Agreement regarding such Confidential
Information and intellectual property rights will result in irreparable injury
to the affected Party for which monetary damages alone would not be an adequate
remedy. Therefore, the Parties agree that in the event of a breach or threatened
breach of such provisions, the affected Party shall be entitled to specific
performance and injunctive or other equitable relief as a remedy for any such
breach or anticipated breach without the necessity of posting a bond. Any such
relief shall be in addition to and not in lieu of any appropriate relief in the
way of monetary damages.
9. LIMITATION OF LIABILITY
UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY
SPECIAL, INCIDENTIAL, INDIRECT, STATUTORY OR CONSEQUENTIAL DAMAGES OR ANY LOST
REVENUE, LOST PROFITS RESULTING FROM, ARISING OUT OF OR RELATED TO ITS
PERFORMANCE OR FAILURE TO PERFORM ANY OF ITS OBLITATIONS UNDER, OR BREACH OF
THIS AGREEMENT, WHETHER OR NOT EITHER PARTY HAS BEEN ADVISED, KNEW OR SHOULD
HAVE KNOWN OF THE POSSIBILITY OF SUCH DAMAGES. THE FOREGOING LIMITATION OF
LIABILITY SHALL NOT APPLY TO TOPTIER'S OBLIGATION TO INDEMNIFY BAAN UNDER
SECTION 10 HEREOF OR TO BREACHES BY EITHER PARTY OF SECTION 8 HEREOF.
10. INDEMNITY
TopTier will defend at its expense and indemnify and hold harmless Baan
from and against any action, suit, or other proceeding, or settlement thereof,
to the extent that such action, suit or proceeding
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arises out of or results from any claim, allegation or finding that any
exploitation of the TopTier Products, Baan Branded Products or the Additional
Products by Baan hereunder infringes the Intellectual Property Rights of any
third party. TopTier shall pay those losses, damages, expenses and costs,
awarded against, or incurred by Baan, or as a result of, any such suit, action
or other proceeding, or any settlement thereof, provided that (i) Baan promptly
notifies TopTier in writing of any such claim, (ii) TopTier shall be accorded
control of the defense and of all negotiations for settlement or compromise of
such claim, and (iii) Baan cooperates with TopTier, at TopTier's expense, in the
defense and settlement of such claim, including providing to TopTier such
information and assistance as TopTier may reasonably request.
11. TERM AND TERMINATION
11.1. TERM. Unless earlier terminated in accordance with its terms, this
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Agreement shall commence as of the Effective Date and shall remain in full force
for a period of [*], unless properly terminated by one or other of
the Parties according to the provisions of this Section 11. This Agreement shall
automatically renew for additional one (1) year periods unless either Party
provides the other with at least [*] written notice of its intention to
terminate prior to expiration of the then-current Term.
11.2. TERMINATION FOR BREACH. Either Party may terminate this Agreement if
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the other Party is in material breach of any term, condition or provision of
this Agreement, which breach, if capable of being cured, is not cured within
thirty (30) days after the non-breaching Party gives the breaching Party written
notice of such breach.
11.3. TERMINATION FOR BANKRUPTCY; CHANGE OF CONTROL. Each Party may
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terminate this Agreement and all rights and licenses granted hereunder effective
immediately upon notice that a Bankruptcy Event has occurred with respect to the
other Party, without thereby relieving the other Party of its financial
obligations under this Agreement. Baan may terminate this Agreement effective
immediately upon notice of a Change of Control of TopTier involving a Baan
direct competitor (by way of illustration, the following are the commonly known
names of Baan direct competitors: [*]). Change of Control of TopTier means (a)
the direct or indirect acquisition of either (i) the majority of the voting
stock of TopTier or (ii) all or substantially all of the assets of TopTier in a
single or series of related transactions; or (b) TopTier is merged with or into
another entity.
11.4. EFFECT OF TERMINATION. IF EITHER PARTY TERMINATES THIS AGREEMENT
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OTHER THAN (I) AS PROVIDED IN SECTION 11.1; OR (II) OTHER THAN BY THE MUTUAL
CONSENT OF THE PARTIES, THEN NONE OF EITHER PARTY'S FINANCIAL OBLIGATIONS WILL
BE RELIEVED OR CHANGED AND EACH PARTY SHALL BE OBLIGATED TO MAKE FULL PAYMENT OF
ALL AMOUNTS DUE AND OWING UNDER THIS AGREEMENT, EXCEPT IN THE CASE OF A
TERMINATION BY BAAN FOR A CHANGE OF CONTROL OF TOPTIER (SEE SECTION 11.3 ABOVE).
IF BAAN TERMINATES THIS AGREEMENT BECAUSE OF A CHANGE OF CONTROL OF TOPTIER AS
DESCRIBED IN SECTION 11.3 ABOVE, BAAN SHALL HAVE NO OBLIGATION TO MAKE ANY
PAYMENTS CALLED FOR IN THIS AGREEMENT THAT WOULD ARISE FOLLOWING THE DATE OF
SUCH TERMINATION; HOWEVER, BAAN SHALL PAY ANY UNPAID AMOUNTS DUE UP TO THE DATE
OF SUCH TERMINATION.
11.5. ESCROW.
------
10
11.5.1. ESCROW ACCOUNT. Within thirty (30) days of the Effective
--------------
Date, TopTier shall establish with Sourcefile, an escrow agent, a Source Code
escrow account, governed by the agreement with Sourcefile, as attached in
EXHIBIT E. TopTier agrees to place into such escrow account a copy of the Source
---------
Code for the TopTier Products, the Additional Products and the Baan Branded
Products, as supplemented from time to time by TopTier, along with the related
Documentation (collectively, "Source Materials"); provided, however, that
TopTier shall not be obligated to make deposits into the escrow account more
frequently than twice per year. Baan shall have the right at any time to contact
the escrow agent for the purpose of confirming that the Source Materials in the
escrow account and verifying the instructions to the escrow agent to release the
Source under the circumstances specified in Section 11.4.3 below. Baan shall
bear all fees, expenses and other charges to open and maintain such escrow
account.
11.5.2. RELEASE. TopTier's agreement with the escrow agent shall
-------
provide that a copy of the Source Materials will be delivered to Baan by the
escrow agent in any of the following events: (i) a Bankruptcy Event occurs with
respect to TopTier that is not resolved within sixty (60) days and TopTier has
refused to meet its support obligations; (ii) TopTier discontinues or is in
material breach of its support obligations for the TopTier Products, the
Additional Products or the Baan Branded Products and does not provide
appropriate support within thirty (30) days after receiving a request from Baan
to do so; or (iii) this Agreement is terminated improperly and not in accordance
with the provisions of Section 11.
11.5.3. LICENSE. In the event of a release of escrow to Baan, under
-------
the conditions of the Sourcefile agreement, Baan shall have a nontransferable,
nonexclusive license to use the Source Materials solely to support and maintain
the TopTier Products, the Additional Products and the Baan Branded Products
licensed to Baan under this Agreement. Baan shall have no rights to use the
Source Material for its own purposes of development, nor rights to distribute,
transfer, copy, sell, sublicense, assign, display, demonstrate or convey the
Source Materials or the information in the Source Materials to any third party,
nor shall Baan use the Source Materials for any purpose other than Maintenance
and Support of the TopTier Products, the Additional Products and the Baan
Branded Products and TopTier shall retain all ownership rights, title and
interest in and to the Source Materials, including all Intellectual Property
Rights therein and thereto.
11.6. SURVIVAL. The following sections of this Agreement shall survive
--------
termination by either Party: Sections 1, 6, 7, 8, 9, 10, 11 and 12.
11.7. AVAILABLE REMEDIES. Termination of all or any portion of this
------------------
Agreement in accordance with this Section shall not limit either Party from
pursuing any other remedies otherwise available to it at law or in equity,
including injunctive relief, and not otherwise precluded by this Agreement.
12. GENERAL
12.1. TAXES. All prices herein are in U.S. Dollars and are exclusive of any
-----
applicable taxes. Each Party is responsible for complying with the collection,
payment and reporting of all taxes imposed by any governmental authority
applicable to its activities in connection with the sale, lease, delivery or
license of the Deliverables under this Agreement. Neither Party is responsible
for the taxes that may be imposed on the other Party. Situations may arise where
governmental authorities require either Party to withhold from amounts payable
to the other Party. In such cases, such Party may withhold the amount of taxes
due from payments to be made to the other Party under this Agreement and remit
the taxes withheld to the governmental authority.
11
12.2. COMPETING PRODUCTS. Nothing contained herein shall be construed as
------------------
precluding either Party from developing, promoting, marketing, distributing and
licensing other products that compete directly or indirectly with the other
Party's Products.
12.3. WAIVER. The failure of either Party to insist on the strict
------
performance of any terms, covenants and conditions of this Agreement at any
time, or in any one or more instances, or its failure to take advantage of any
of its rights hereunder, or any course of conduct or dealing, shall not be
construed as a waiver or relinquishment of any such rights or conditions at any
future time and shall in no way affect the continuance in full force and effect
of all the provisions of this Agreement.
12.4. HEADINGS. Headings used in this Agreement are for convenience of
--------
reference only and shall not be construed as altering the meaning of this
Agreement or any of its parts.
12.5. APPLICABLE LAW. This Agreement shall be governed by and construed in
--------------
accordance with the laws of the state of California, without reference to rules
of conflict of law. The Parties hereby irrevocably agree that any action
commenced that relates to the terms of this Agreement shall be brought in a
court within the state of California, including a federal district court,
located in San Jose, California.
12.6. SURVIVAL OF LICENSES. Any licenses to the Baan Products, the
--------------------
Additional Products or the TopTier Products granted by a Party to End Users and
any rights to the Baan Products, the Additional Products or the TopTier Products
that a Party may reasonably require for the purpose of providing support to End
Users shall survive the termination or expiration of this Agreement for any
reason.
12.7. SEVERABILITY. If any provision of this Agreement is held to be
------------
illegal, invalid or unenforceable, the remaining terms shall not be affected.
The Agreement shall be interpreted as if the illegal, invalid or unenforceable
provision had not been included in it, and the invalid or unenforceable
provision shall be replaced by a mutually acceptable provision which, being
valid and enforceable, comes closest to the intention of the Parties underlying
the invalid or unenforceable provision.
12.8. NOTICES. All notices, requests, demands, or communications required
-------
or permitted hereunder shall be in writing, delivered personally or by
electronic mail, facsimile, overnight delivery service at the respective
addresses set forth below (or at such other addresses as shall be given in
writing by either Party to the other). All notices, requests, demands or
communications shall be deemed effective upon receipt for personal delivery, or
on the business day following the date of sending by electronic mail, facsimile
or overnight delivery service.
BAAN:
Baan Development B.V.
Baron van Xxxxxxxxxxxx 00
0000 XX Xxxxxxxxx
Xxx Xxxxxxxxxxx
Attn: Vice President, Chief Technology Counsel
Fax: 00 000 00 0000
TOPTIER: Top Tier, Israel, Ltd.
0000 Xxx Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Vice President, Operations
12
Fax: 000 000-0000
12.9. ASSIGNMENT. The respective rights and obligations provided in this
----------
Agreement shall bind and inure to the benefit of the Parties, their legal
representatives, successors and permitted assigns. Neither Party shall assign
this Agreement, voluntary or involuntarily, including without limitation by
operation of law, in whole or in part, without the prior written consent of the
other Party, which consent shall not be unreasonably withheld. Any assignment in
violation of this Section 12.9 shall be null and void.
12.10. RELATIONSHIP OF PARTIES. Nothing contained in this Agreement shall
-----------------------
be deemed or construed as creating a joint venture or partnership between
TopTier and Baan. Except as expressly provided herein, neither Party is by
virtue of this Agreement authorized as an agent, employee or legal
representative of the other, neither Party shall have power to control the
activities and operations of the other and neither Party shall have any power or
authority to bind or commit the other.
12.11. FORCE MAJEURE. Neither Party shall be liable in case of force
-------------
majeure. The Parties to this Agreement agree that force majeure shall include
(but shall not be limited to): material breakdown of equipment, labor disputes
of whatever nature or cause, and any other circumstances reasonably beyond the
control of one of the Parties.
12.12. NONSOLICITATION. During the Term and for a period of twelve (12)
---------------
months thereafter, neither Party will directly or indirectly solicit for
employment employees of the other Party; provided, however, that this Section
12.12 shall not be construed as precluding either Party from hiring any Person
that seeks employment or responds to a general advertisement.
12.13. ENTIRE AGREEMENT. This Agreement constitutes the entire
----------------
understanding of the Parties, and supersedes all prior or contemporaneous
written and oral agreements, representations or negotiations with respect to the
subject matter hereof. This Agreement may not be modified or amended except in
writing signed by both Parties.
IN WITNESS WHEREOF, this Agreement is executed by the duly authorized
representatives of the Parties as of the date first set forth above.
TOPTIER, ISRAEL, LTD. BAAN DEVELOPMENT B.V.
/s/ Xxxxxx Xxxxxx /s/ Xxxxxx Xxxxxxx
------------------------------ ------------------------------
Signature Signature
Xxxxxx Xxxxxx Xxxxxx X. Xxxxxxx
------------------------------ ------------------------------
Name Name
Chairman Top Tier Israel VP, Chief Technology Counsel
------------------------------ ------------------------------
Title Title
13
EXHIBIT A
AFFILIATES
Baan Company N.V.
Baan International B.V.
Baan Software B.V.
Baan Austria GmbH
Baan (Schweiz) AG
Baan Nederland B.V.
Baan Belgium N.V.
Baan France S.A.
Baan Nordic AB
Baan UK Ltd.
Baan Holding Central Europe GmbH
Baan South Africa (Proprietary) Limited
Baan U.S.A., Inc.
Baan Canada, Inc.
Baan Brasil Sistemas de Informatica Ltda.
Baan Argentina Ltda.
Baan Info Systems India Pvt. Ltd.
Baan Software India Pvt. Ltd.
Baan Japan Co., Ltd.
Baan (Malaysia) Sdn. Bhd.
Baan Education Asia Pacific (M) Sdn Bhd.
Baan Singapore Pte. Ltd.
Baan Asia Pacific Pte. Ltd.
Baan Korea Co. Ltd.
Baan Australia Pty. Ltd.
Baan Iberica I.S., S.A.
Baan Italia S.r.l.
Baan China Limited
Antalys, Inc.
Matrix Holding B.V.
Beologic A/S
CAPS Logistics, Inc.
CODA Plc.
Compact 3000 Ltd.
14
EXHIBIT B
BAAN BRANDED PRODUCTS
1. BDN: Baan Data Navigator (provides HyperRelational navigation on Baan
products)
2. BDN-DE: Baan Data Navigator - Development Environment.
3. BON: Baan Olap Navigator (provides HyperRelational navigation and Olap
views against the BaanBis decision Manager)
15
EXHIBIT C
TOPTIER PRODUCTS
1. Top Tier WebNavigator (provides HyperRelational navigation against
non-Baan datasources)
2. Top Tier Portal Pack (provides database drivers for the Top Tier Web
Navigator and Top Tier EIP)
3. Top Tier Development Environment (provides development technology for
the Top Tier Web Navigator)
16
EXHIBIT C-1
ADDITIONAL PRODUCTS
1. TopTier Enterprise Information Portal (provides hosting for iViews,
personalize, document management, search, etc. and includes TopTier Reports, Top
Tier Olap and Top Tier WebNavigator)
17
EXHIBIT D
MAINTENANCE AND SUPPORT
Maintenance and Support shall consist of First Point of Contact, First
Line Support, Second Line Support and Third Line Support, defined as follows:
FIRST POINT OF CONTACT ("FPOC") means responding to End User support
------------------------------
calls in the following manner: (i) the End User encounters a support
issue and reports this issue to Baan; (ii) the case is registered and
logged into Baan's support system; (iii) Baan will assess the case and
identify which Party's products are responsible for the support issue;
(iv) Baan will transfer the issue to TopTier along with any necessary
customer information; (vi) the case log will be updated with status
assigned to TopTier in the Baan support system and the End User will be
informed of the transfer by Baan.
FIRST LINE SUPPORT ("FLS") means the provision of assistance to end-
-------------------------
users with regard to the supported products via telephone, fax,
electronic mail or otherwise, including (i) identification of the
source or cause of the support issue experienced by the end user (ii)
whenever at its reach, directly provide a solution to the support issue
received including fixed object and patch distribution, and, if
applicable, (ii) escalation of the support issue to the Second Line
Support.
SECOND LINE SUPPORT ("SLS") means the provision of assistance via
--------------------------
telephone, fax, electronic mail or otherwise with respect to the
supported products, including (i) receiving and processing support
issues relating to the supported products as identified and escalated
by the FLS, (ii) characterizing and analyzing support issues, (iii)
registry administration - and whenever possible - resolution of calls,
(iv) clarification of functions and features of the supported products,
(v) clarification of the end user documentation for the supported
products, and (vi) guidance in the operation of the supported products.
THIRD LINE SUPPORT ("TLS") means the follow up activities related to
-------------------------
support issues concerning the supported products as escalated by the
SLS and which entail but are not limited to (i) further and detailed in
depth analysis of the said support issues leading to a) well documented
and accurate description of the support issue at stake, b) replication
of the said support issue on a test system accepted by the Baan product
engineering group c) documented case resolution path, (ii) deployment
of efforts till the case is resolved either by means of a workaround or
the intervention of product engineering.
As between Baan and TopTier, Baan shall provide FLS to End Users and TopTier
shall provide SLS and TLS to Baan only, and not to End Users; except in the case
where the support request relates to problems not solved in standard patches or
updates, in which case TopTier shall provides such SLS and TLS directly to End
Users. Baan shall provide TopTier with access to its internal support system
throughout the term of this Agreement.
Baan shall properly train its support personnel in order for it to be able to
fulfill its support obligations hereunder.
18
EXHIBIT E
Escrow
SourceFlex
Software Escrow Agreement
This contract is a two-party agreement between SourceFile and the software
developer. End-users may sign on to this agreement as they license the
technology from the developer. The SourceFlex contract provides the opportunity
to serve all licensees of a particular software developer for one or more
systems.
Developer(----------------------)SourceFile
Licensee 1 - Deposit A
- Deposit B
Licensee 2 - Deposit A
Deposit C
Licensee 3 - Deposit C
19
SOURCEFLEX
----------
SOFTWARE SOURCE CODE ESCROW AGREEMENT
SOURCEFILE ACCOUNT NUMBER: 7965
----------------
1. PARTIES.
--------
This Software Source Code Escrow Agreement, ("Agreement") effective as of the
last date next to the signatures below, is between SourceFile LLC, a
California limited liability company doing business as SourceFile
("SourceFile") located at 0000 Xxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx
00000, TopTier Software, Inc, located at 0000 Xxx Xxxxxxx, Xxxxx 000, Xxx
Xxxx, Xxxxxxxxxx 00000 ("Depositor"), and each Beneficiary described in
Paragraph 3.4 (each a "Beneficiary", collectively the "Beneficiaries").
2. RECITALS.
---------
2.1. Depositor licenses software to Beneficiaries in object code form (the
"Software") pursuant to software license agreements (each a "License
Agreement", collectively the "License Agreements"). The Software in source
code form (the "Source Code"), including all relevant commentary,
explanation, documentation, and instructions to understand, maintain,
correct, complete, duplicate and compile the Source Code, and revisions to
the Source Code is collectively hereinafter defined as the "Source
Material". The Software and Source Material are the proprietary and
confidential information of Depositor, and Depositor desires to protect
such ownership and confidentiality. A description of the Software subject
to this Agreement as of the date hereof is attached hereto as Exhibit "A."
------------
With the addition of new Beneficiaries pursuant to paragraph 3.4, a
-------------
description of the software (the "Software Package" or "Software
Packages") subject to this agreement must be noted in Exhibit "B" for each
-----------
respective new Beneficiary.
2.2. The purpose of this Agreement is to establish an escrow to protect
Depositor's ownership and confidentiality of the Software and Source
Material and to protect Beneficiary's legitimate use of the Software by
assuring the availability of the Source Material in the event certain
conditions set forth in Section 3.5 of this Agreement occur.
-----------
2.3. The parties desire that this Agreement be an agreement supplementary to
the License Agreement pursuant to the United States Bankruptcy Code (S)
365 (n).
2.4. In consideration of the mutual covenants and conditions contained in this
Agreement, the parties agree as follows.
3. SOURCE MATERIAL ESCROW PROCEDURES.
----------------------------------
3.1. Delivery of Source Material and Updates to SourceFile. Depositor shall
-----------------------------------------------------
deliver to SourceFile a sealed parcel that contains the Source Material
(the "Parcel"). Depositor
-1-
shall also deliver to SourceFile all Source Material updates, revisions,
and/or new versions (each an "Update", collectively "Updates") within
thirty (30) days of the release of Software for such Update, which shall
be added to and become part of the Parcel and the Source Material.
Depositor shall send to SourceFile a duplicate Parcel within three (3)
days after receiving written notice from SourceFile that the Source
Material or any Update has been destroyed or damaged. With each delivery
of the Source Material and Update, Depositor agrees to provide the
information specified in Exhibit A, "Description of the Software," a copy
---------
of which is attached hereto and incorporated herein by reference. Title
and ownership of the media upon which the Source Material is stored,
exclusive of the Source Material itself, shall vest with SourceFile upon
delivery of the Parcel.
3.1.1. Delivery of Encrypted Updates to SourceFile. Depositor shall have
-------------------------------------------
the option to encrypt Updates ("Encrypted Update") and, pursuant
to acceptable instructions from SourceFile, transmit the Encrypted
Update over the Internet to SourceFile's File Transfer Protocol
site ("FTP Site").
3.1.2. SourceFile shall not be liable to Depositor or Beneficiary for any
Encrypted Update, or any part thereof, that is transmitted over
the Internet to SourceFile's FTP Site but is not received in whole
or in part, or for which no notification of receipt is given
pursuant to Section 3.2.
3.2. Acknowledgement of Receipt by SourceFile. SourceFile shall promptly notify
----------------------------------------
Depositor and Beneficiary of receipt of the Parcel, Updates and Encrypted
Updates. Notification of receipt of the Parcel will be sent via certified
mail, return receipt requested or by private delivery service such as
Federal Express, Airborne, United Parcel Service, or DHL Worldwide
Express. Notification of receipt of each Update and Encrypted Update will
be promptly sent by E-Mail to the E-mail address described in the Notices
section of this Agreement, and posted to a page at SourceFile's web site
(http:\\xxx.xxxxxxxxxx.xxx) reserved for Depositor and Beneficiary.
SourceFile shall provide Depositor and Beneficiary with a user
identification name and password as required to access said page, and
notice shall be effective upon delivery of such user identification name
and password, and verification by SourceFile that receipt of the Update
has been posted to said page. SourceFile shall not be responsible for
procuring the delivery of the Source Material in the event of failure by
the Depositor to do so.
3.3. Record Keeping, Storage, Copies and Inspection of Source Material.
-----------------------------------------------------------------
SourceFile shall have no obligation to determine the completeness,
accuracy or physical condition of the contents of the Parcel, or whether
the Parcel contains the Source Material. SourceFile shall maintain
complete written records of all materials deposited by Depositor pursuant
to this Agreement. Depositor and Beneficiary shall be entitled at
reasonable times during normal business hours and upon reasonable notice
to SourceFile to inspect the records that SourceFile maintains pursuant to
this Agreement, and to inspect the facilities of SourceFile and the
physical condition of the Source Material.
-2-
3.4. Qualified Beneficiaries. Beneficiary shall have the right to enforce the
-----------------------
Source Material Release Procedure described in Paragraph 3.6 only if (i)
Beneficiary is a party to a License Agreement with the Depositor that is
in force and not in default by Beneficiary, and (ii) all fees are paid to
SourceFile. All other licensees of the Software shall have no rights
hereunder and SourceFile shall have no duties to such licensees.
Beneficiaries may be added upon written notice to SourceFile and execution
and delivery by such new Beneficiary of Exhibit "B". Each new Beneficiary
-----------
shall be bound by the terms and conditions of this Agreement only if such
Beneficiary has sent to SourceFile a fully executed copy of the form of
acknowledgement attached hereto as Exhibit "B" in which Beneficiary
-----------
accepts the terms and conditions of this Agreement. A schedule of
Beneficiaries effective as of the date of this Agreement is attached
hereto as Exhibit "C".
-----------
3.5. Release Conditions. The following events shall be considered "Release
------------------
Conditions".
3.5.1. Depositor requests in writing that SourceFile release the Source
Material to Beneficiary;
3.5.2. Depositor is unwilling or unable to support or maintain the
Software in breach of its License Agreement with Beneficiary after
receipt of written notice of breach from Beneficiary and after any
cure period has ended;
3.5.3. [OPTIONAL] The appointment of a receiver for Depositor, or any
other proceeding involving insolvency or the protection of or from
creditors, and the same has not been discharged or terminated
without any prejudice to Beneficiary's rights or interests under
the License Agreement within thirty (30) days;
3.5.4. [OPTIONAL] Depositor has ceased its ongoing business operations,
or has ceased the sale, licensing, maintenance or other support of
the Software and no successor of Depositor has undertaken the
sale, licensing, maintenance and/or support of the Software; or
3.5.5.
3.6. Source Material Release Procedures. SourceFile shall hold the Parcel
----------------------------------
pursuant to the following terms and conditions.
3.6.1. In the event SourceFile is notified in writing of a Release
Condition (the "Release Condition Notice"), and provided that
SourceFile has been paid all fees and costs then due and owing,
then SourceFile shall promptly deliver a copy of the Release
Condition Notice to Depositor.
3.6.2. If SourceFile does not receive Contrary Instructions (defined
below) from Depositor in response to the Release Condition Notice
within thirty (30) days of
-3-
SourceFile's delivery to Depositor of the Release Condition
Notice, then SourceFile shall deliver a copy of the Source
Material to Beneficiary. "Contrary Instructions" are defined as
Depositor's written notice to SourceFile with a copy to the
subject Beneficiary, stating that the Release Condition has not
occurred or has been cured.
3.6.3. If SourceFile receives Contrary Instructions from Depositor within
thirty (30) days of SourceFile's delivery to Depositor of the
Release Condition Notice, then SourceFile shall not deliver a copy
of the Source Material to the Beneficiary, but shall continue to
hold the Parcel until: (1) otherwise directed by the Depositor and
Beneficiary jointly in writing; (2) five (5) business days after
SourceFile has received a copy of an order or judgment of a court
of competent jurisdiction directing SourceFile as to the
disposition of the Source Material; or (3) five (5) business days
after SourceFile has received a copy of the final decision of the
arbitrator directing SourceFile as to the disposition of the
Source Material.
3.7. Limitations on Beneficiary Use of Source Material. Upon release of the
-------------------------------------------------
Source Material to Beneficiary, Beneficiary shall use the Source Material
only for the purposes authorized by the License Agreement and for no other
purpose. Beneficiary further agrees that the Source Material is
confidential information, and that Beneficiary shall not disclose such
confidential information to any person or entity. Beneficiary shall
instruct its personnel to keep the Source Material confidential by using
the same care and discretion that they use with similar data designated by
Beneficiary as confidential. Beneficiary shall maintain the Source
Material in a safe, secure location when not in use and shall immediately
destroy the Source Material in the event Beneficiary's rights under the
License Agreement terminate.
4. TERM AND TERMINATION.
---------------------
4.1. Term of Agreement. This Agreement shall have an initial term of three (3)
-----------------
years from the date hereof unless earlier terminated as provided herein.
The term shall be automatically renewed on a yearly basis thereafter,
unless Depositor, Beneficiary, or SourceFile notifies the other parties in
writing at least forty-five (45) days prior to the end of the then current
term of its intention to terminate this Agreement.
4.2. Termination of Agreement. This Agreement shall terminate upon the
------------------------
occurrence of any of the following.
4.2.1. Upon notice after the initial term pursuant to Paragraph 4.1 or
after an increase of fees and costs pursuant to Section 5;
4.2.2. Upon release of the Source Material pursuant to Section 3;
-4-
4.2.3. Upon termination of the License Agreement of a Beneficiary, then
this Agreement shall terminate as to that Beneficiary;
4.2.4. In the event of non-payment of fees due SourceFile; provided,
however that in such event SourceFile shall provide written notice
of non-payment to all parties to this Agreement. If the amount
past due is not received in full within thirty (30) days of the
date of said notice, then SourceFile shall have the right to
terminate this Agreement by sending written notice of termination
to all parties; provided, however that if payment is due from a
Beneficiary and not from Depositor, then this Agreement shall
terminate as to that Beneficiary only. SourceFile shall have no
obligation to take any action under this Agreement so long as any
amount due SourceFile remains unpaid. Any party may cure past
amounts due, whether or not obligated under this Agreement.
4.3. Return of Source Material. In the event of termination of this Agreement,
-------------------------
SourceFile shall return any Source Material in its possession to Depositor
forthwith. If SourceFile is unable to locate Depositor, after reasonable
attempts to do so within 90 days from the date of termination of this
Agreement, then SourceFile will destroy the Source Material.
4.4. Survival of Terms. In the event of termination of this Agreement, the
-----------------
rights and obligations of the parties shall terminate, other than the
obligation of Depositor and/or Beneficiary to pay SourceFile all fees and
costs then due, and the obligations of Depositor and Beneficiary pursuant
to Paragraph 3.8 (Limitations on Beneficiary Use of Source Material, page
4), Section 9 (Confidentiality; Restriction on Access to Source
Material; Copies), Section 10 (Limitation of Liability of SourceFile),
Section 12 (Arbitration of Disputes), and Section 13.7 (Attorney's Fees).
5. COMPENSATION OF SOURCEFILE.
---------------------------
Depositor and/or Beneficiary shall pay SourceFile for its services rendered
hereunder in accordance with SourceFile's then current schedule of fees and
costs, a copy of which is attached hereto as Exhibit "D," subject to
----------
Depositor's or Beneficiary's obligation for fees and costs described in
Exhibit "B." SourceFile may increase its fees and costs annually, but in such
----------
event Depositor and/or Beneficiary may terminate this Agreement by giving
SourceFile written notice of termination within thirty (30) days of notice of
such increase, whereupon termination shall be effective thirty (30) days
after delivery of written notice of termination.
6. REPRESENTATION AND WARRANTIES OF DEPOSITOR.
-------------------------------------------
Depositor represents and warrants the following:
6.1. The Source Material as delivered to SourceFile is capable of being used to
generate the latest version of the Software and that the Depositor shall
deliver further copies as and when necessary. The Source Material shall
contain all information in human-readable
-5-
form and on suitable media to enable a reasonably skilled programmer or
analyst to understand, maintain and correct the Software without the
assistance of any other person.
6.2. Depositor has the right to possess the Source Material, free and clear of
any liens, security interests, or other encumbrances;
6.3. Depositor shall deliver a duplicate Parcel within 10 days of receipt of a
notice served upon it by SourceFile under the provisions of Clause 3.1;
6.4. Depositor owns or has licensed the Intellectual Property Rights in the
Source Code and has the right and authority to grant SourceFile and
Beneficiary the rights granted by Depositor to SourceFile and Beneficiary
in this Agreement;
6.5. The Source Material is a copy of Depositor's proprietary information
corresponding to that described in Exhibit "A", is readable from the media
upon which it is written as deposited and, unless the Source Material or
any part thereof is transmitted to SourceFile under the terms and
conditions of the Encryption Update Rider, is not encrypted.
7. TECHNICAL VERIFICATION.
-----------------------
7.1. Upon the Source Code being deposited with SourceFile, SourceFile shall
perform those tests in accordance with its Standard Technical Verification
Service from time to time and shall provide a copy of the test report to
the parties to this Agreement.
7.2. Beneficiary shall be entitled to require that SourceFile carry out a Full
Verification. Any reasonable charges and expenses incurred by SourceFile
in carrying out a Full Verification will be paid by the Beneficiary.
7.3. Subject to the provisions of Clauses 7.1 and 7.2, SourceFile shall bear no
obligation or responsibility to any person, firm, company or entity
whatsoever to determine the existence, relevance, completeness, accuracy,
effectiveness or any other aspect of the Source Material.
8. INTELLECTUAL PROPERTY RIGHTS.
-----------------------------
The release of the Source Material to the Beneficiary will not act as an
assignment of any Intellectual Property Rights that the Depositor possesses
in the Source Code.
9. CONFIDENTIALITY; RESTRICTION ON ACCESS TO SOURCE MATERIAL; COPIES.
------------------------------------------------------------------
SourceFile acknowledges that the Parcel contains proprietary information of
Depositor and that SourceFile has an obligation to preserve and protect that
confidentiality. Except as otherwise required to carry out its duties
hereunder, SourceFile shall not permit any
-6-
