EXHIBIT 10.17
EXCLUSIVE SOFTWARE LICENSING AGREEMENT
(JAPAN)
THIS AGREEMENT is made this 17th day of June, 1999 ("EFFECTIVE
DATE") between C3D Digital, (hereinafter "C3D Digital"), a Utah, U.S.A.
corporation, whose principal place of business is 00 Xxxx 000 Xxxxx #000,
Xxxx Xxxx Xxxx, Xx, and Software Too Corporation (hereinafter "LICENSEE"), a
business entity incorporated pursuant to the laws of the country of Japan, as
follows:
WHEREAS, C3D DIGITAL and LICENSEE desire to enter into an agreement
for the supply and license of certain computer software in the country of
Japan;
NOW, THEREFORE, C3D DIGITAL hereby appoints LICENSEE as an exclusive
Licensee within the country of Japan and all of its legal subdivisions,
territories and possessions according to the boundaries accepted by the
United Nations. The license of the Products hereunder shall be governed only
by the terms and conditions of this Agreement.
1. DEFINITIONS
1.1 Products
For purposes of this Agreement, Products and defined as any
software products offered for sale by C3D DIGITAL as specifically set
forth in the addendum attached hereto as "C3D DIGITAL PRODUCTS LICENSE
LIST", Addendum A and as modified from time to time by C3D DIGITAL. It
is intended that the LICENSEE shall have the right to sell all of the
Products.
1.2 Localization
"Localization" is defined as translation of the English language
version of the document software of the Products into the Japanese
language.
1.3 Territory
"The Territory" is defined as the country of Japan and all of its
possessions and territories as acknowledged by the United Nations.
1.4 Computer Program
"Computer Program" is defined as any instruction or plurality of
instructions for controlling the operation of a CPU.
1.5 Customers
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"Customers" are defined as third party customers of LICENSEE who
purchase and/or receive license for the Products for their own internal
use or for resale or sublicense in accordance with the terms and
conditions herein.
1.6 End Users
"End Users" are defined as third party customers of LICENSEE or
LICENSEE's Customers who purchase and/or receive license for the
Products for their own internal use only.
2. ROYALTY STRUCTURE GOVERNING THE LICENSE
The royalty structure governing the sale of the products shall be
governed by the addendum entitled "ROYALTY STRUCTURE", Addendum B attached
hereto and incorporated by reference.
3. APPOINTMENT
3.1 LICENSEE'S Obligations
LICENSEE shall perform in accordance with the terms and conditions set
forth in " LICENSEE'S DUTIES AND OBLIGATIONS", Addendum C attached
hereto and incorporated herein by reference.
4. ROYALTY PAYMENT
All payments made during the term of this Agreement, or during any renewal
terms, shall be made by LICENSEE to C3D DIGITAL based on the addendem
entitled "ROYALTY STRUCTURE", Addendum B attached hereto and incorporated by
reference via wire transfer to C3D DIGITAL'S bank account at the following
designation:
C3D DIGITAL
KeyBank National Association
Xxxx Xxxx Xxxx, Xx 00000
Routing Number 124000 737
Account Number 440580045092
C3D DIGITAL shall be deemed to have been paid at such time as payment is
irrevocably credited to its bank account.
The price of the Products shall be quoted and fixed in Japanese Yen.
Payment for the price of the Products shall be made in U.S. Dollar which
shall be equivalent to the price of the Products quoted in Japanese Yen at
the date of the delivery of the Products.
Exchange rate for above payment shall be the selling rate of the US Dollars
quoted by Tokyo Mitsubishi Bank at the date of the Royalty report.
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5. Force Xxxxxx
Neither party shall be liable for any damages or penalties for delay in
delivery or for failure to give notice of delay when such delay is due to the
elements, acts of God, acts of civil or military authority, fires or floods,
epidemics, quarantine restrictions, war (within the legal borders and/or
international water limits of the Nation(s) in which either Party to this
Agreement is required under the terms of this Agreement to specifically
perform), riots, strikes, lock-outs, or other labor disputes, delays in
transportation, delays in delivery by vendors and any changes in
specifications which are requested by LICENSEE and agreed to by C3D DIGITAL
or any other causes, without limitation, which are beyond the reasonable
control of the delayed party. The delivery date shall be considered extended
by a period of time equal to the time lost as a result of any delay which is
excusable under this clause; provided, however, that such extension shall in
no event exceed one month and in the event the extension period exceeds one
month, LICENSEE may cancel the applicable individual contract.
(s) RIGHT TO USE THE PRODUCTS
Right to Use The Products
Subject to the terms and conditions of this Agreement, C3D DIGITAL
hereby grants to LICENSEE the exclusive right to sell, distribute, and
use the Products.
6.2 Right to Grant C3D DIGITAL sublicenses to Customers
6.2.1 Subject to the terms and conditions of this Agreement,
LICENSEE shall facilitate the grant of sublicenses on C3D
DIGITAL's behalf to its Customers to use the Software, subject
to the terms set out herein.
(vii) REPORTS AND RECORDS
1. Required Records
LICENSEE shall keep full, clear and accurate records
with respect to all copies of the Products sold.
7.1.2 LICENSEE shall furnish to C3D DIGITAL within ten (10)
days after the end of each month, a statement setting out
sales, inventory levels and any such other material
transactions. If there were not transactions during that
month, that fact be shown on the report.
7.2.2 Right to Audit
C3D DIGITAL shall have the right, during LICENSEE'S normal
business hours, to have an independent account verify the
records of LICENSEE regarding the supply of Products that are
reasonably necessary to verify the accuracy of reports issued
from Section 7.1.2. The account shall
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maintain the confidence of such information except to provide
C3D DIGITAL with a confirmation of the accuracy of LICENSEE's
calculations, or a description of the deviations therefrom.
8. WARRANTY
8.1 Software Warranty
8.1.1 C3D DIGITAL warrants that it owns and has the right to
distribute the Products and grant LICENSEE the right to sell
the Products on C3D DIGITAL'S behalf.
8.1.2 C3D DIGITAL warrants that the software will conform to
the agreed specifications and be free from defects in for a
period of one hundred fifty (150) days from the Date of
Delivery, or until the time when 90 days have passed from the
date on which the Products are or software is delivered to the
End Users, whichever is shorter. C3D DIGITAL's only liability
under this warranty shall be to repair or replace any such
defects.
8.2 General
8.2.1 The above warranties are for the benefit of and shall
apply only to LICENSEE.
8.2.2 C3D DIGITAL's warranties shall not apply to any defects
of the Products, which have has been subjected to accident,
neglect, misuse, abuse, vandalism, negligence in
transportation or handling, failure of electrical power, air
conditioning, humidity control, causes other than ordinary
use, or causes beyond C3D DIGITAL's control, or if the
Products was not properly maintained by LICENSEE during the
warranty period; provided, however that C3D DIGITAL shall have
duty to prove the above for its exemption from the warranty
obligation.
8.2.3 There shall be no warranty or liability for any
Products which has been modified by LICENSEE without C3D
DIGITAL'Ss prior written approval.
8.2.4 The Products outside the scope of these warranties will
be furnished at C3D DIGITAL's then current standard charges.
8.2.5 C3D DIGITAL shall have full and free access to the
Products at LICENSEE's site, subject to the approval of
LICENSEE, which shall not be unreasonably withheld.
8.3 Exclusion of Liability
There are no warranties, conditions, guarantees or representations as
to merchantability or fitness for a particular purpose or other
warranties, conditions, guarantees or representations, whether express
or implied, oral or in writing, except as expressly stated herein.
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9. LIMITATION OF LIABILITY
9.1 LICENSEE's Failure
In no event will C3D DIGITAL be liable for any loss or damage caused by
LICENSEE's failure to perform LICENSEE'S responsibilities.
9.2. Consequential Loss
C3D DIGITAL shall not, in any event, be liable for any indirect,
special, emotional or consequential damages, however arising
(including, but not limited to loss of anticipated profits) in
connection with or arising out of the furnishing, functioning or use of
the Products or any item and shall not be liable for any other damages
except as provided in this Agreement.
9.3 Time
Except in respect of the liability of C3D DIGITAL for personal injury,
no action, regardless of form, arising out of the transactions under
this Agreement may be brought by LICENSEE more than two (2) years after
the cause of the action has accrued.
10. GEOGRAPHIC LIMITATIONS AND COMPETITIVE PRODUCT RESTRICTION
For the duration of this Agreement, LICENSEE agrees that, unless otherwise
specifically authorized in writing by C3D DIGITAL, it will not solicit the
sale, license, or supply the Products, maintain an office or branch for that
purpose, or hold stocks, directly or indirectly sell or inventory the
Products outside the Territory.
11. INDEMNIFICATION
Except as provided in this Agreement, either party agrees to indemnify and
hold harmless the other party, its agents, employees, successors and assigns
from and against any and all liabilities, losses, damages, claims, suits and
expenses, including legal expenses (including but not limited to attorney's
fees), of whatsoever kind and nature imposed on, incurred by, or asserted
against the other party, its agents, employees, successors and assigns
relating to or arising out of the possession, use, selection, delivery,
purchase, lease or operation of the Products, or any failure on the part of
the first party to perform or comply with the terms of this Agreement.
12. PATENTS AND COPYRIGHTS
12.1 Defense and Indemnification
Subject to the conditions of this clause, C3D DIGITAL agrees that it
will defend LICENSEE, at C3D DIGITAL's cost and expense, and will
indemnify and hold harmless LICENSEE, from and against all suits,
claims, losses, damages and expenses arising from any actual
infringement of any patent, trademark, or copyright, based upon the as
a result of import, sale or use of any Products purchased hereunder.
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12.2 Further Representation
C3D DIGITAL further represents that as of the date of this Agreement,
no suits, claims or proceedings have been made or instituted against
C3D DIGITAL alleging that C3D DIGITAL has violated any patent,
trademark, copyright, registered design, trade secret or other
proprietary right of any third party in relation to the Products.
12.3 Notice and Defense
LICENSEE shall give C3D DIGITAL prompt written notice of any such claim
or action upon LICENSEE becoming aware of same. In addition, LICENSEE
shall, at C3D DIGITAL's cost, provide all reasonable assistance in C3D
DIGITAL's defense or settlement efforts and C3D DIGITAL shall have the
sole authority to defend or settle such claim.
12.4 Limitation of Liability
C3D DIGITAL shall not be liable for any alleged infringement of patent
or copyright if such infringement is based upon the use of the Products
in combination with other equipment, software, products, or devices not
furnished by C3D DIGITAL if such claim would have been avoided but for
the modification or combination.
12.5 Entire Warranty
The foregoing states the entire warranty and liability of C3D DIGITAL
with respect to any alleged or actual patent, trademark, or copyright
infringement.
13. DESIGN CHANGES
Subject to Clause 4.3, C3D DIGITAL reserves the right to make substitutions
and modifications in the specifications of Products to be supplied hereunder.
C3D DIGITAL assumes no obligation to modify or change any Products previously
delivered, or to supply new Products in accordance with earlier
specifications.
14. DOCUMENTATION
Standard documentation will be supplied by C3D DIGITAL in accordance with C3D
DIGITAL'S Documentation Policy in effect as of the date an Order is accepted
by C3D DIGITAL.
Additional documentation is available under C3D DIGITAL'Ss prevailing terms,
conditions and prices.
15. TERM AND TERMINATION
15.1 Term
This Agreement shall commence upon Effective Date, which shall be the
day of signing of the agreement. Thereafter, this Agreement shall
remain in effect for a period of two years from the Effective Date.
This Agreement may be extended upon written approval of the parties for
one (1) year. Each such extension shall require written approval.
15.2 Termination
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Either party may terminate this Agreement at any time by notice in
writing to the other party, if the other party commits an
irremediable breach of this Agreement, persistently repeats a
remediable breach, or commits any remediable breach and fails to
remedy it within thirty (30) days after receipt of notice of the
breach. LICENSEE shall be deemed to be in breach if it fails to
advertise, provide reasonable and adequate technical support or if
it is supporting or selling a directly competitive product. If the
other party shall commit an act of bankruptcy, to, or be put into
liquidation or receivership, pass a resolution for its winding up
(otherwise than for the purpose of amalgamation or reconstruction),
or make any assignment for the benefit of its creditors, then the
other party may terminate this Agreement forthwith upon notice.
15.3 Other Remedies
Termination of this Agreement shall be in addition to any other
remedies which either party may have under this Agreement or otherwise.
15.4 Results of Termination by C3D DIGITAL
15.4.1 In the event that termination is properly effected by
C3D DIGITAL under the terms and conditions of this Agreement,
no residual rights, except as set forth below, shall remain
with LICENSEE hereunder, who shall accordingly be obliged to
return to C3D DIGITAL, at LICENSEE's sole cost and expense
whatever C3D DIGITAL may request in respect of the Products
supplied to LICENSEE hereunder, provided that LICENSEE may
sell or dispose of any Products to any third party after such
expiration or the termination hereof. On return of the
Products, C3D DIGITAL shall repay to the LICENSEE the amounts
paid in respect of such Products provided they are new unused
and in the same condition as when they left C3D DIGITAL's
premises.
15.4.2 Upon LICENSEE's default in the payment of monies
due in addition to other remedies which may be available,
C3D DIGITAL shall be authorized to suspend all deliveries
and to cancel any pending individual contract orders, and
shall render all pending invoices immediately payable.
15.5 Expiration of Agreement
In the event that this Agreement shall expire and LICENSEE is in full
compliance with all its terms and conditions, LICENSEE shall be
permitted to continue selling, on C3D DIGITAL'S behalf, its remaining
inventory of Products, on a non-exclusive basis, upon the terms and
conditions of this Agreement for a term of six (6) months from the date
of expiration. The expiration of this Agreement shall not give rise to
the payment of any indemnity whatsoever by either party to the other.
In this connection, LICENSEE expressly waives any indemnity for loss of
clientele, investments not fully amortized, any employee's termination
indemnities and all advertising and media costs.
15.6 No Release
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Any expiration and/or termination of this Agreement shall not alter the
rights, duties and obligations of the parties pursuant to the terms and
conditions of this Agreement, or for any orders accepted by C3D
DIGITAL individual contracts entered into prior to the date of such
expiration and/or termination.
16. RIGHTS AND CONFIDENTIALITY
16.1 The Products
LICENSEE agrees that title and ownership to the Products and
proprietary rights therein, and any modifications or upgrades thereof
whether made by C3D DIGITAL or LICENSEE, shall remain exclusively
with C3D DIGITAL.
16.2 Proprietary Information
LICENSEE agrees that all plans, drawings, specifications, and other
information supplied by C3D DIGITAL to LICENSEE, or derived therefrom,
including the Products and all information relating to them ("the
Confidential Information") except for the ones which are already known
to LICENSEE at the time of disclosure or the ones which are provided by
any third party, shall remain the property of C3D DIGITAL. LICENSEE
agrees to use its best efforts (which in any event shall not be less
than the efforts LICENSEE takes to ensure the confidentiality of its
own proprietary and other confidential information) to keep any and all
of the Confidential Information secret and confidential, and shall not
copy or publish or disclose it to others, or authorize its employees or
agents or anyone else to copy, publish or disclose it to others, except
as provided in this Agreement, or with C3D DIGITAL's written approval,
and shall return such Confidential Information to C3D DIGITAL at its
request.
16.3 Duties upon Termination
Except as provided for herein, upon termination of the License herein
granted, LICENSEE shall deliver to C3D DIGITAL all material furnished
by C3D DIGITAL pertaining to the Confidential Information and shall
not thereafter make any use of it whatsoever.
17. ASSIGNMENT AND SUBCONTRACTING
17.1 Assignment by LICENSEE
This Agreement is personal to LICENSEE, and LICENSEE may not assign or
transfer any of its rights or obligations under this Agreement without
the prior written consent of C3D DIGITAL.
17.2 Assignment by C3D DIGITAL
C3D DIGITAL may delegate the performance of any of its obligations
hereunder to any corporation which controls, is controlled or is under
common control with C3D DIGITAL; provided that C3D DIGITAL shall remain
liable for performance of the obligations so delegated. In addition,
C3D DIGITAL may assign its rights to payments due and owing to it
hereunder.
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18. NOTICE REQUIREMENT
18.1 Notice to the Bank of Japan
The parties acknowledge and agree that LICENSEE shall notify the Bank
of Japan, if it deems the same necessary, pursuant to the Foreign
Exchange and Foreign Trade Control Law.
18.2 Notice to the Fair Trade Commission
The parties further acknowledge and agree that LICENSEE, if LICENSEE
deems it necessary, shall report the conclusion of the Agreement to the
Fair Trade Commission within thirty (30) days after the execution
thereof.
18.3 Preparation and Submission of Required Notices
LICENSEE shall prepare the notifications and reports mentioned in the
prior paragraph. C3D DIGITAL shall cooperate with and assist LICENSEE
by furnishing all information needed therefor. C3D DIGITAL or its
agents shall have the right fully participate in all aspects of the
procedures for preparing such notifications and reports, and shall be
allowed to examine all documents prior to their submission to the
appropriate authorities.
18.4 Notice to C3D DIGITAL
LICENSEE shall furnish copies to C3D DIGITAL of satisfactory evidence
of the government notifications and reports made by it pursuant to this
Article.
19. GENERAL TERMS AND CONDITIONS
19.1 No Waiver
Failure by C3D DIGITAL the party hereto to enforce at any time or for
any period of time the provisions of this Agreement shall not be
construed as a waiver of such provisions, and shall in no way affect
C3D DIGITAL's right to later enforce such provision.
19.2 Severability
If any part of this Agreement is determined by any court or tribunal of
competent jurisdiction to be wholly or partially unenforceable for any
reason, such unenforceability shall not affect the remaining parts of
this Agreement.
19.3 Remedies
All rights and remedies conferred under this Agreement or by any other
instrument or law shall be cumulative and may be exercised singularly
or concurrently.
19.4 Independent Third Party
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LICENSEE is not and will not hold itself out as the representative,
agent, commission-sales agent, servant or employee of C3D DIGITAL for
any purpose. This Agreement creates no relationship of joint venture,
partnership, limited partnership, or agency between the parties, and
the parties hereby acknowledge that no other facts or relations exist
that would create any such relationship between them. Neither party has
any right or authority to assume or to crease any obligation or
responsibility on behalf of the other party except as may from time to
time be provided by written instrument signed by both parties.
19.5 Headings
The headings contained in this Agreement are for convenience only and
shall not affect the interpretation or meaning of this Agreement.
19.6 Survival
Notwithstanding the expiration or termination of this Agreement or any
renewal period hereof, it is acknowledged and agreed that those rights
and obligations which by their nature are intended to survive such
expiration or earlier termination shall survive.
19.7 Entire Agreement
This Agreement constitutes the entire agreement between the parties and
supersedes all prior agreements, understandings and negotiations with
respect to the subject matter thereof. This Agreement may not be
changed or modified except by a written instrument duly executed by
each of the parties hereto.
19.8 Law, Jurisdiction, Arbitration
19.8.1 Governing Law
The formation, validity, construction and performance are
governed by statutory, decision or other laws of the State of
Utah, United States of America, as of the date hereof.
19.8.2 Arbitration
All disputes, controversies or differences which may arise
between the parties hereto, out of or in relation to or in
connection with this Agreement, or for any breach hereof,
shall be settled by arbitration in Salt Lake City, Utah,
U.S.A.
The "appointing authority" provided for in said rule shall
be the American Arbitration Association. The prevailing
party in any such arbitration shall be entitled to an award
of costs and attorneys' fees.
1 Jurisdiction
In the event litigation shall, for any reason, ensue between
the parties in connection with this Agreement, the exclusive
forum and jurisdiction shall be the U.S. Federal District
Court of Utah, Salt Lake City, Utah, U.S.A..
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20. NOTICES
All notices required or desired to be given hereunder shall be in writing and
if not personally delivered, be sent by telex or facsimile (with a copy by
ordinary mail) or by registered or recorded delivery. If faxed or personally
delivered, notices shall be deemed to have been given on the day when
personally delivered or faxed, addressed to the other party at the address
for service specified herein, provided that either party may from time to
time change the address to which notices to it are to be sent by giving
notice of such change to the other party. If mailed by registered or
certified mail, notices shall be deemed to have been given when received
unless otherwise specifically stated.
Mail To: C3D Digital, Inc.
Attn: Xxxxxx Xxxxxxx
000 Xxxxx Xxxxxx Xxxx Xxxxx
Xx. Xxxxxx, Xxxx 00000
Mail To: Software Too
Attn:
LICENSEE acknowledges that it has read and agrees to the terms and conditions
contained in this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized representatives as of the date set forth
below.
DATED this 17th day of June, 1999.
/s/ Xxxxxx Xxxxxxx
-------------------------------------------
Xxxxxx Xxxxxxx, Vice President
0X.XXX (A subsidiary of C-3D Digital, Inc.)
SOFTWARE TOO CORP.
/s/
---------------------
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Addendum A
C3D DIGITAL PRODUCTS LIST
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Addendum B
ROYALTY STRUCTURE
LICENSEE shall compensate C3D DIGITAL as follows:
I. ROYALTY:
LICENSEE agrees to guarantee $96,000 a month for six months from the signing
of this agreement. Any sales above $96,000 shall go to pay down the current
inventory credit outlined in Addendum D. C3D DIGITAL shall receive royalty
payments based on the following: 10,000 minimum payment. Any sales above the
minimum payments shall go to pay down the current inventory credit.
A. General License
Thirty percent (30%) of the Japan list price (Yen) on localized and English
language version sold through channels (i.e., stores and middlemen).
B. Sales to Educational Institutions
Thirty Five percent (35%) of the Japan list price (Yen) on localized and
English language version sold to accredited academic institutions.
C. Direct Sales to End Users
Thirty Five percent (35%) of the Japan list price (Yen) on localized and
English language version sold to End Users.
D. Market Development Fund
An additional Five percent (5%) shall be made available 2 years or until this
fund pays $150,000.
II. BUNDLING:
The parties recognize that circumstances may arise in which either LICENSEE
or C3D DIGITAL may choose to bundle the Products with other software, or C3D
DIGITAL may choose to bundle the Product with third-party hardware Products.
It is agreed that, in such event, the discounts to be paid to LICENSEE C3D
DIGITAL will be determined on a case-by-case basis. The parties acknowledge
that each such bundling arrangement may differ sufficiently that a standard
discount cannot be set in this Agreement. Accordingly, the parties agree to
negotiate in a good faith and commercially reasonable manner to determine the
appropriate discount amount.
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Addendum C
LICENSEE'S DUTIES AND OBLIGATIONS OUTLINES
1. Maintain adequate experienced personnel and facilities, as follows: .
2. Use best efforts to promote supply of products within the Territory,
as follows: .
3. Provide technical support, as follows:
__First call support level, like installation instruction, etc.
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Addendum D
INVENTORY CREDIT
C3D Digital agrees to grant LICENSEE a credit of $945,042.26 for the returned
inventory units stocked as of March 31, 1999 at LICENSEE's warehouse. The
list of returned units is attached as Attachement 1.
The credit shall be paid down with the royalty amounts that exceed the
monthly guarantees as defined in Addendum B.
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