EXHIBIT 10.16
SUBSCRIPTION LICENSE AGREEMENT
This Subscription License Agreement (this "Agreement") executed this 19th
day of December, 2000 is by and between VerticalNet, Inc. ("VNI") and Tradeum,
Inc., dba VerticalNet Solutions ("VNS"), on the one hand, and Converge, Inc., a
Delaware corporation formerly known as eHITEX, Inc. ("Converge"), on the other
hand.
RECITALS
WHEREAS, VNI through one or more VNI Subsidiaries (as defined below),
including, but not limited to, VNS (collectively, "Vert") is in the business of
licensing various proprietary products for use in connection with electronic
marketplaces and other business-related information management systems; and
WHEREAS, Converge wishes broad rights and licenses to such products on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
set forth below, the parties agree as follows:
AGREEMENT
1. Definitions.
1.1 "Affiliate" means, when used with reference to a party, any
individual or entity directly or indirectly Controlling, Controlled by or under
common Control with such party.
1.2 "API Documentation" means documentation for a Trade Secret
Module that describes its input and output formats and content, and that is
sufficient for a person of ordinary skill in the industry to enhance, update and
maintain the Products with respect to which the Trade Secret Module's
application program interface(s) interact.
1.3 "Business Day" means a day other than a Saturday, Sunday or
federal holiday.
1.4 "Cataclysmic Event" means a situation in which a Converge
Marketplace is unable to provide Trading Functionality to its users, which
situation (i) is caused by an Error, and (ii) occurs at a time during which the
Marketplace Protection Measures for such Converge Marketplace are being
implemented in all material respects.
1.5 "Cataclysmic Event Cure" means substantial restoration of the
ability of the Converge Marketplace to provide Trading Functionality to its
users, which restoration is not followed by a subsequent Cataclysmic Event
within the following 24-hour period.
1.6 "Control" (including all derivations thereof) means, with
respect to a party, the direct or indirect ownership of at least 50% of the
outstanding voting securities of a party, or the right to control the policy
decisions of such party.
1.7 "Converge Link" shall mean a Link that contains a Converge Xxxx
and will take users of other web sites to a mutually agreed upon Converge Web
Site.
1.8 "Converge Marketplace" means a Public Marketplace operated by or
for Converge or any Converge Subsidiary, which Public Marketplace serves (other
than through incidental use) only the High Technology Industry, including,
without limitation, the Converge Web Site.
1.9 "Converge Marks" shall mean trademarks, service marks, trade
names, domain names, designs or logos of Converge.
1.10 "Converge Remedy Election Date" means the date on which a
Converge Remedy Election (as such term is defined in Section 10.3.2) occurs.
1.11 "Converge Subsidiary" means any corporation or other entity
that is wholly-owned, directly or indirectly, by Converge.
1.12 "Converge Web Site" means a web site owned and operated by or
for Converge or any Converge Subsidiary, such as the web site at xxx.xxxxxx.xxx,
or any successor(s) to such web site (including, without limitation,
xxx.xxxxxxxx.xxx), which web site or successor(s) shall be designed to serve
primarily the High Technology Industry.
1.13 "Deliverables" shall have the meaning ascribed to such term
under the Professional Services Agreement.
1.14 "Deliverables in Process" means Deliverables with respect to
which, as of the date on which the Product Term ends, material development or
implementation work is being or has been performed under the Professional
Services Agreement.
1.15 "Deployed Products" means Products being tested, implemented or
utilized by Converge, as of the date on which the Product Term ends, on an
ongoing basis in conjunction with the maintenance, enhancement and operation of
any Converge Marketplace, but excluding any Vert-Owned Deliverables.
1.16 "Deployed Product Upgrades" means any modification of or
improvement to a functional component of a Deployed Product, which functional
component is utilized by Converge on an ongoing basis as of the end of the
Product Term, and which functional component is made generally available on its
own or as a part of a broader release of a Product, Enhancement, or Upgrade,
whether or not such modification or improvement adds new program features or
functions to such functional component of the Deployed Product.
1.17 "Derivative Works" means works that are based on underlying
works and that would be copyright infringements if prepared without the
authorization of the copyright owners of the underlying works.
1.18 "Documentation" means the documentation for the Products that
is made generally available by Vert to users or licensees of such Products or
other third parties to whom the documentation is directed.
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1.19 "Effective Date" means the "Closing Date" under the Membership
Interest Purchase Agreement, dated as of even date herewith, among VNI, XXXX.xxx
LLC and Converge, it being understood and agreed that the respective rights and
obligations of the parties to this Agreement are subject to the consummation of
the transactions contemplated by such Membership Interest Purchase Agreement.
1.20 "Enhancements" means any modifications or improvements to a
Product that adds new program features or functions to such Product, including,
without limitation, any new version or new release of a Product.
1.21 "Error" means a failure of a Product to substantially conform
to its corresponding Documentation (or if there is no such Documentation, to its
closest reasonable equivalent), as such Documentation is provided by Vert to
Converge hereunder.
1.22 "Future Products" means Products not existing as of the
Effective Date.
1.23 "High Technology Industry" means entities doing business in the
computing, telecommunications and/or consumer electronics markets.
1.24 "Industry Standard" means generally-recognized standards of
practice and procedure within the information technology industry for the
design, maintenance and operation of mission-critical data centers supporting
critical business applications for a Public Marketplace substantially similar to
the Converge Marketplace in question.
1.25 "Intellectual Property" shall mean any and all trade secrets,
patents, copyrights, trademarks, service marks, trade names, domain names, trade
dress, URLs, brand features, know-how and similar rights of any type under the
laws of any applicable governmental authority, including, without limitation,
all applications and registrations relating to any of the foregoing.
1.26 "Intellectual Property Rights" shall mean all rights in and to
Intellectual Property.
1.27 "Link" shall mean a link (including, but not limited to, a
hyperlink, button or banner) that connects two web sites in a manner so that
when a user clicks on the link, the user is transferred from one web site to a
second web site. A "Link from web site A to web site B" indicates that web site
A is the web site of origin and web site B is the web site to which the user is
linked.
1.28 "Maintenance & Support Services" means (a) Error correction and
other support services for Products in accordance with the provisions of Exhibit
C and (b) Updates and Enhancements to Products as they become generally
available.
1.29 "Marketplace Protection Measures" means Industry Standard
policies and practices designed to ensure that all hardware and software
associated with any Converge Marketplace provide Industry Standard levels of
reliability and availability. Such Industry Standard policies and procedures for
each Converge Web Site, at a minimum, shall include the policies and procedures
specified in Exhibit I hereto. Such Industry Standard policies and
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procedures for other types of Converge Marketplaces shall be mutually agreed
upon by the parties in writing prior to the date each such other type of
Converge Marketplace is first launched by Converge, and Exhibit I hereto shall
be promptly amended to incorporate said additional Marketplace Protection
Measures. Should any relevant Industry Standard policies and practices be
revised at any time, the parties shall revise the Marketplace Protection
Measures accordingly, with due consideration for the cost and effect on
operations in relation to the expected improvement in reliability and
availability, and Exhibit I hereto shall be promptly amended to incorporate such
revised policies and practices. The parties will consult with the objective of
determining mutually agreeable Marketplace Protection Measures; provided,
however, that Vert's approval of such measures shall not imply an endorsement or
recommendation of the adequacy of such measures, except for the purpose of
determining whether a Trigger Event has occurred.
1.30 "Marketplace Response Procedures" means, with respect to any
Converge Web Site, the measures specified in Exhibit I hereto. With respect to
other types of Converge Marketplaces, the Marketplace Response Procedures shall
be mutually agreed upon by the parties in writing prior to the date each such
other type of Converge Marketplace is first launched by Converge, and Exhibit I
hereto shall be promptly amended to incorporate said additional Marketplace
Response Procedures.
1.31 "Object Code" means computer programming code in compiled,
machine readable format, running, to the extent available, on each of Unix (at
least Tru64 and HP-UX) and Windows NT (or their successor operating systems),
together with all related end-user or installation manuals and other similar
Documentation.
1.32 "Personnel" means agents, employees, independent contractors,
temporary employees or subcontractors engaged or appointed by Converge, VNI or
VNS, respectively.
1.33 "Problem" means a Severity Level 1, 2, 3 or 4 problem with a
Product, as such problems are described in greater detail in Exhibit C hereto.
1.34 "Product Term" means the period commencing on the Effective
Date and ending on the soonest of (a) the date immediately preceding the third
anniversary of the Effective Date, (b) the Converge Remedy Election Date or (c)
the Vert Remedy Election Date.
1.35 "Products" means (a) all present and future software products
and tools, including separately identified modules contained therein, that are
owned by VNI or any VNI Subsidiary or licensed by Vert with the right to grant
the necessary sublicense right to Converge, except where such sublicense right
has been granted to Vert solely for the purpose of reselling the third party
software on a stand-alone basis and for which Vert customarily separately
charges a substantial additional license fee to its sublicensees, and that are
made generally available by VNI or any VNI Subsidiary, on either a stand-alone
basis or as part or component of a service or another Product provided by or for
VNI or any VNI Subsidiary, during the Product Term (whether or not generally
available, in development or planned as of the Effective Date), including,
without limitation, the products, tools and separately identified modules on
Exhibit A hereto; and (b) all Updates and Enhancements to such present and
future products, tools and modules that typically are identified separately in
VNI documentation describing the product
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structure and functionality that are owned by VNI or any VNI Subsidiary or
licensed by VNI or any VNI Subsidiary with the right to grant the necessary
sublicense rights to Converge, and that are made generally available by VNI or
any VNI Subsidiary, on either a stand-alone basis or as part or component of a
service or another Product provided by or for VNI or any VNI Subsidiary, during
the Product Term; (c) all Deployed Product Upgrades that are owned by VNI or any
VNI Subsidiary or licensed by VNI or any VNI Subsidiary with the right to grant
the necessary sublicense rights to Converge; and (d) all Vert-Owned
Deliverables.
1.36 "Professional Services Agreement" means the Professional
Services Agreement, dated as of even date herewith, among VNS and Converge.
1.37 "Public Marketplace" means (a) an electronic marketplace or
exchange through which products or services are offered or sold, which
marketplace or exchange may be accessed concurrently by more than one buyer and
more than one seller ("many-to-many"), including, without limitation, the public
marketplaces or exchanges of the following entities: e2Open, Inc., eChip, Inc.
and eConnections, Inc., and (b) virtually private views or instantiations
operating within or as a subset of a Public Marketplace ("one-to-many"). Public
Marketplace does not include (a) instantiations of an electronic marketplace
designed to facilitate purchase and sale transactions solely between only one
unique and constant buyer buying from one or many sellers in that marketplace or
(b) instantiations of an electronic marketplace designed to facilitate purchase
and sale transactions solely between only one unique and constant seller selling
to one or many buyers in that marketplace. To the extent a single entity uses
any Trade Product to buy and sell using the same instantiation of such Trade
Product, it shall be considered a Public Marketplace. For the purposes of this
definition, when determining whether one or more buyers or sellers has access to
an electronic marketplace or exchange, the following rules shall apply: (i) if
one or more Affiliates of a person or entity that has access to an electronic
marketplace or exchange have access to the marketplace or exchange, such person
or entity and its Affiliate(s) that have access to the marketplace or exchange
shall be counted as one buyer or seller, as the case may be, (ii) if one or more
divisions or operating units of an entity have access to an electronic
marketplace or exchange, such divisions and/or operating units and the entity
shall be counted as one buyer or seller, as the case may be, and (iii) if one or
more divisions or operating units of Affiliates have access to an electronic
marketplace or exchange, such divisions and/or operating units and the
Affiliates shall be counted as one buyer or seller, as the case may be.
1.38 "Response Initiation Date/Time" means, with respect to a
Cataclysmic Event, (i) 30 minutes following VNS' receipt of the corresponding
Cataclysmic Event Notice if such Cataclysmic Event Notice is received by VNS
during Support Hours; and (ii) 90 minutes following VNS' receipt of the
corresponding Cataclysmic Event Notice if such Cataclysmic Event Notice is
received by VNS outside of Support Hours.
1.39 "Source Code" means computer programming code in human
readable, high-level language format, together with all related Documentation
(including programmers' notes and annotations, logic flows, etc.).
1.40 "Support Day" means, for each location where VNS (or, if
applicable for the Product in question, VNI or any VNI Subsidiary) provides
Maintenance & Support Services,
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the greater of (a) the normal business days typical for that location (e.g., for
VNS' location in California, Monday through Friday, excluding VNS holidays), or
(b) the actual business days of operation at that location.
1.41 "Support Hours" means, for each location where VNS (or, if
applicable for the Product in question, VNI or any VNI Subsidiary) provides
Maintenance & Support Services, the greater of (a) the normal business hours
typical for that location (e.g., for VNS' location in California, between the
hours of 8 a.m. and 5 p.m., Pacific Time on Support Days for such location), or
(b) the actual hours of operation at that location.
1.42 "Trade Product" means the following Products: (a) VerticalNet
Auction; (b) VerticalNet Structured Negotiation; (c) VerticalNet RFP/RFQ; (d)
VerticalNet Exchange; (e) VerticalNet Catalogs; and (f) all other
generally-available Products that enable buyers and sellers to transact through
an electronic marketplace or exchange. Separately identified modules will only
be considered Trade Products when used in conjunction with Trade Products.
1.43 "Trade Secret Module" means any functionally discrete,
separately compilable component of a Product, the design of which is not
generally known or easily discovered by observation or examination, and with
respect to which the Source Code is treated by Vert with a degree of care
significantly above and beyond the level with which it normally treats other
Source Code, provided that such component includes application program
interface(s) sufficient to allow Converge to enjoy benefits substantially
similar to those that Converge would have enjoyed if it had obtained Source Code
for such component. As of the Effective Date, such Trade Secret Modules include:
the Parametric Matching Engine, C2SF engine, C2Hub, Business Publisher and
Business Publisher Agent. Trade Secret Modules also shall include functionally
discrete components of Future Products that meet the requirements set forth in
the first sentence of this paragraph.
1.44 "Trading Functionality" means the ability for users of the
relevant Converge Marketplace to access substantially all of the functionality
provided by the Trade Products, as then deployed, within the relevant Converge
Marketplace.
1.45 "Trigger Event" means, with respect to any Converge
Marketplace, the date on which Converge first implements the applicable
Marketplace Protection Measures in all material respects for such Converge
Marketplace. For each Converge Marketplace, Converge shall provide Vert with
written notice of the date on which Converge believes a Trigger Event has
occurred, which notice shall be accompanied by reasonable supporting
documentation of the Marketplace Protection Measures that Converge has
implemented. Said date shall be the date of the Trigger Event for such Converge
Marketplace unless Vert disputes Converge's claim thereof in writing within 10
Business Days following receipt of Converge's written notice. Said notice of
dispute shall indicate with reasonable specificity the reasons for such dispute.
In the event of a dispute concerning the date of a Trigger Event, the parties
shall mutually agree upon an independent industry expert who shall resolve the
dispute.
1.46 "Updates" means any modifications or improvements to a Product
that does not add new program features or functions to such Product, including,
without limitation,
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any workaround, bug fix, modification or improvement that corrects a programming
error, a failure of the Product to conform to its corresponding Documentation or
other software problem.
1.47 "Vert Link" shall mean a Link that contains a Vert Xxxx and
will take users of other web sites to a mutually agreed upon Vert Web Site.
1.48 "Vert Marks" shall mean trademarks, service marks, trade names,
domain names, designs or logos of VNI or a VNI Subsidiary.
1.49 "Vert-Owned Deliverables" means any "Deliverable" under the
Professional Services Agreement that is owned by VNS in accordance with the
terms of that Agreement.
1.50 "Vert Remedy Election Date" means the date on which a Vert
Remedy Election (as such term is defined in Section 10.3.1) occurs.
1.51 "Vert Web Site" means a web site owned and operated by or for
VNI or a VNI Subsidiary.
1.52 "VNI Subsidiary" means any corporation or other entity that is
wholly-owned, directly or indirectly, by VNI, including, without limitation,
VNS.
1.53 "Year" means a twelve-month period commencing on the Effective
Date or an anniversary of the Effective Date.
2. Products Licenses and Usage.
2.1 License Grant: Converge Marketplace Usage. Vert grants to
Converge and the Converge Subsidiaries, on the terms of this Agreement, an
irrevocable, perpetual, worldwide (subject to qualification as set forth in
Section 2.5), non-exclusive (except as expressly set forth in Section 2.6),
non-transferable (except in the event of a permitted transfer of this Agreement
under Section 14.11), and non-sublicensable (except as expressly permitted under
Section 2.3) right and license:
2.1.1 to use, load, store, transmit, execute, copy, distribute
internally and as otherwise permitted under this Section 2.1, in any medium or
distribution technology whatsoever, known or unknown, display and perform the
Products, in Object Code format only, in connection with the creation,
maintenance, enhancement and operation of any Converge Marketplace, including
unlimited instantiations of the Products in connection therewith;
2.1.2 to use the Products in connection with other software
products, tools and services that are part of any Converge Marketplace or that
are offered on any Converge Marketplace;
2.1.3 to allow third parties to access and use the Products,
in Object Code format only, at any Converge Marketplace using browser or other
access technology contemplated by the designs of the Products; and
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2.1.4 to market, provide and sell to third parties any
Converge products and services based on, using, enabled, facilitated and/or
implemented by the Products, which products and services are provided by
Converge through or via any Converge Marketplace.
2.2 Additional Terms: Converge Marketplace Usage.
2.2.1 No Restrictions on Number of Users. There shall be no
restriction on the number of subscribers to or registered users of, or numbers
of transactions conducted on or through, any Converge Marketplace.
2.2.2 No Additional Fees. Except as otherwise expressly stated
herein, neither Converge nor any Converge Subsidiary shall be obligated to pay
any fees to Vert based upon the number of subscribers to or registered users of,
or numbers of transactions conducted on or through, any Converge Marketplace.
Except as otherwise expressly stated herein, Vert shall not directly charge, or
attempt to assess or collect fees from, third-party users for any use of
Products through or via use of any Converge Marketplace.
2.2.3 Third Party Licenses. When considering whether to
implement any new instantiations of Products, Converge shall consult with Vert
and Vert shall inform Converge whether such new instantiations would require
Vert to pay any significant third-party license fees in connection therewith. In
determining whether to implement such instantiations, Converge shall, in good
faith, consider the financial impact on Vert of multiple or additional
instantiations and will take that factor, as well as Converge's legitimate, good
faith business, financial and technical reasons, into account in making its
determination as to the number of instantiations.
2.2.4 Terms of Use. The Converge Marketplace shall include
terms and conditions of use substantially similar legal effect to those included
in Exhibit G hereto (the "Terms of Use"). The Terms of Use shall be displayed on
the Converge Marketplace in a manner consistent with customary industry practice
and users of the Converge Marketplace shall be required to assent to the Terms
of Use via click-through, in writing or in some other reasonable manner.
Converge shall permit Vert to enforce, and, to the extent reasonably requested,
assist Vert in enforcing its respective rights under the Terms of Use against
persons and entities acting in violation thereof, to the extent Converge is
permitted to do so by law.
2.3 Sublicenses.
2.3.1 Sublicenses to End Users. Converge and the Converge
Subsidiaries may grant to third parties ("End Users") non-sublicensable,
non-transferable sublicenses to install and use components of the Products
required to be installed within such third parties' computing environments
(i.e., within their firewalls) for the sole and limited purpose of permitting
such End Users to interact, integrate and/or interact with any Converge
Marketplace, to include the use of services and products offered at any Converge
Marketplace (each, an "End User License"). Converge shall cause all members of
the Converge Marketplace to accept membership agreements that are (a) at least
as protective of Vert's Intellectual Property Rights as this Agreement and (b)
are otherwise consistent with customary and usual agreements of that type in the
industry. Converge or the applicable Converge Subsidiary shall provide VNS
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with the total number of instantiations of each Product component being deployed
by End Users each quarter; provided, however, that during any quarter after the
first Year in which the number of instantiations of a Product component is less
than ten, Converge shall not have to report the number of instantiations of such
Product component during such quarter.
2.3.2 Other Sublicenses. Should Converge or the Converge
Subsidiaries desire to grant any other sublicenses with respect to the Products,
the parties shall in good faith discuss and consider whether and under what
conditions Converge and the Converge Subsidiaries would be permitted to grant
such other sublicenses, and any license fees and/or revenue share payments with
respect thereto.
2.3.3 No Additional Sublicenses. Except as expressly set forth
in this Agreement, Converge and the Converge Subsidiaries shall have no rights
to sublicense the license rights granted to them hereunder.
2.4 Source Code.
2.4.1 License to Source Code. Subject to the other terms of
this Agreement, Vert grants to Converge and the Converge Subsidiaries an
irrevocable and perpetual (subject to termination as permitted under Section
2.4.4), worldwide (subject to qualification as set forth in Section 2.5),
non-exclusive (except as expressly set forth in Section 2.6), non-transferable
(except in the event of a permitted transfer of this Agreement under Section
14.11), and non-sublicensable right and license to internally use, load, store,
transmit, test, execute, distribute, in any medium or distribution technology
whatsoever, known or unknown, display, modify and have modified, and make and
have made Derivative Works of, any Source Code furnished to Converge under this
Agreement and of the Object Code forms thereof, solely in connection with use of
the Products by Converge and the Converge Subsidiaries as permitted under this
Agreement. All such modifications and Derivative Works to the Source Code,
together with all Object Code forms thereof, shall be owned by Converge without
divesting Vert or its licensor's ownership of the underlying Source Code and the
Object Code forms thereof, and (b) Converge shall remain permitted to use the
underlying Object Code only as part of the Products licensed to Converge
hereunder. Converge shall have the right to engage third-party consultants that
are Converge-certified system integrators to perform such activities on behalf
of Converge; provided, however, that each such third-party consultant shall
agree in advance and in writing to be bound by obligations of nondisclosure and
nonuse no less stringent than those set forth in this Section 2.4.1 and in
Section 9. Subject to the foregoing sentence, Converge and the Converge
Subsidiaries shall not provide any other persons or entities with access to any
of the Source Code furnished to Converge under this Agreement.
2.4.2 Delivery of Source Code. In the event of a Converge PSA
Termination or a Converge PSA Conversion Election (as such terms are used in the
Professional Services Agreement), Vert shall deliver to Converge, within 30 days
thereafter, the Source Code for all Deployed Products and Deliverables in
Process (including, with respect to Trade Secret Modules, either the Source Code
for such Trade Secret Modules or their corresponding API Documentation) to the
extent such Source Code is owned by VNI or any of the VNI Subsidiaries.
Thereafter, Vert shall deliver to Converge the Source Code for all Deployed
Product Upgrades (including, with respect to Trade Secret Modules, either the
Source Code for
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such Trade Secret Modules or their corresponding API Documentation) that Vert
makes generally available during the remainder of the three-year period
commencing on the Effective Date, to the extent such Source Code is owned by VNI
or any of the VNI Subsidiaries. Each such delivery of the Source Code for
Deployed Product Upgrades shall occur within 30 days after Vert makes such
Deployed Product Upgrades generally available, whether as part of an Update or
Enhancement or otherwise. In the event Vert contests the occurrence of the Event
of Default underlying the Converge PSA Termination Event or the Converge PSA
Conversion Election, the matter shall be resolved as expeditiously as possible
in accordance with the dispute resolution provisions of the Professional
Services Agreement and no delivery of Source Code hereunder shall occur until
such time as the matter is resolved.
2.4.3 Source Code for Third-Party Products. With respect to
Products that are licensed to VNI or the VNI Subsidiaries by third parties, Vert
will reasonably cooperate with Converge to arrange for delivery of the Source
Code for such Products to Converge in accordance with the provisions of Section
2.4.2.
2.4.4 Loss of Rights to Source Code. In the event of a Vert
Remedy Election all rights of Converge under Section 2.4.1 to use, load, store,
transmit, execute, distribute internally, display, modify and have modified, and
make and have made derivative works of, any Source Code delivered to Converge
under Section 2.4.2, and to receive further Source Code for Deployed Products,
Deployed Product Upgrades and Deliverables in Process under Section 2.4.2, shall
automatically cease. Furthermore, in the event of a Vert Remedy Election,
Converge shall erase, destroy or return to Vert all Source Code delivered to
Converge under Section 2.4.2, together with all copies, modifications and
derivative works thereof, and, upon Vert's written request, shall certify its
compliance with this Section 2.4.4 to Vert in writing.
2.5 Limitation on Worldwide Rights. Notwithstanding any provision in
this Agreement or the Professional Services Agreement to the contrary, no right
or license is granted by Vert to Converge or any of the Converge Subsidiaries
to: (a) use, copy, display, perform or transmit the Products listed in Exhibit E
as "Japan-Restricted Community Products" or "Japan-Restricted Content Products"
(the "Japan-Restricted Community and Content Products") in Japan in connection
with the development, marketing, implementation, operation or provision of any
Internet-based business-to-business vertical trade community that is based on an
industry segment and combines content, community interaction and the ability to
conduct business transactions on-line, including sales of products and services
to businesses, and that has a URL that ends in the top level domain
"________________.xx.xx" (a "Japanese Site"); (b) adapt or translate the
Japan-Restricted Community and Content Products into Japanese in connection with
the development, marketing, implementation, operation or provision of a Japanese
Site; or (c) use a Japanese translation of the software code enabling the
Japan-Restricted Community and Content Products in Japan. Notwithstanding the
foregoing, neither Converge nor any Converge Subsidiary shall be deemed to be
using, reproducing, displaying, performing or transmitting the software code
enabling the Japan-Restricted Community and Content Products, or a Japanese
translation thereof, in Japan if a Converge Web Site containing software code
enabling the Japan-Restricted Community and Content Products, or a Japanese
translation thereof, is hosted outside Japan and is accessed by a third party
inside Japan.
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2.6 Limited Exclusivity. Neither VNI nor any of its Affiliates shall
license, sell, assign or otherwise transfer Trade Products and other Vert-Owned
Deliverables to any person, entity or licensee to create, maintain, enhance or
operate, or be accessed or used via or in connection with, or be marketed or
offered as a service on, any Public Marketplace principally serving the High
Technology Industry, other than a Converge Marketplace, without the prior
written consent of Converge; provided, however, that neither VNI nor any of its
Affiliates shall be deemed to violate the foregoing restriction by operating a
VNI "Industry Marketplace" that has and remains based on substantially the same
elements of its business model as exist on the Effective Date in the VNI
"E-Commerce Centers." The restriction set forth in this Section 2.6 shall be
effective from the Effective Date until the soonest to occur of (a) the date
immediately preceding the Limited Exclusivity Expiration Date (defined below),
(b) the Vert Remedy Election Date or (c) the date immediately preceding the
first anniversary of the date that VNS exercises its right to terminate the
Professional Services Agreement following an "Event of Default" by Converge
under the Professional Services Agreement. For purposes of this Section 2.6
only, the application known as "AutoMatch" shall be deemed a "Trade Product." As
used herein, the term "Limited Exclusivity Expiration Date" means the date
immediately preceding the third anniversary of the Effective Date unless
Converge validly exercises its option set forth in the following sentence, in
which case the "Limited Exclusivity Expiration Date" shall be the date
immediately preceding the fourth anniversary of the Effective Date. Converge
shall have the option to extend the Limited Exclusivity Expiration Date by one
year from the date immediately preceding the third anniversary of the Effective
Date to the date immediately preceding the fourth anniversary of the Effective
Date, exercisable by Converge (i) delivering written notice of exercise to Vert
at least 60 days prior to the date immediately preceding the third anniversary
of the Effective Date and (ii) transferring to VNS $5,000,000 in immediately
available funds (to an account or accounts designated by VNS) on the second
Business Day of the first quarter of Year 4.
2.7 Exclusive Use of Products. The following shall be effective from
the Effective Date until the sooner to occur of (a) the date immediately
preceding the third anniversary of the Effective Date, (b) the Vert Remedy
Election Date or (c) the Converge Remedy Election Date: Converge will use best
efforts to implement, use and deploy Trade Products in connection with the
creation, maintenance, enhancement or operation of any Converge Marketplace, to
the exclusion of any alternative third party software solution, provided that
the Trade Products, in comparison with such third party software solution, (i)
provide equal or superior features, functionality, usability and performance in
all material respects and (ii) cost a reasonably equivalent or lesser amount to
implement and maintain. The parties will work in good faith to identify and
implement pilot releases of Products that are mutually beneficial.
2.8 Use of Documentation. Subject to the other terms of this
Agreement, Converge and the Converge Subsidiaries may access and use the
Documentation, including by private-labeling said Documentation and by
excerpting and/or modifying portions thereof in a manner that is not confusing
or misleading, solely in connection with their use (including ancillary uses,
such as training, marketing and promotion, etc.) of the Products as permitted
under this Agreement.
2.9 Copies. Converge and the Converge Subsidiaries shall be
permitted to make a reasonable number of copies of the Products and the
Documentation for the purposes
11
allowed by this Agreement, which copies shall be stored at locations under the
control of Converge or at the facilities of Converge's third party hosting and
disaster recovery service provider(s). Converge agrees to maintain, and shall
require the Converge Subsidiaries to maintain, accurate and complete written or
electronic records of the number and location of all copies or partial copies of
the Products in their possession or control, including all back-up and archival
copies.
2.10 Third-Party Hosting. Converge and the Converge Subsidiaries
shall have the right to sublicense one or more third-party hosting entities to
reproduce, install, publicly perform, publicly display and host any of the
Products, in Object Code form, on such third party's servers, subject to the
terms of this Agreement. Such sublicenses shall be granted pursuant to written
agreements that authorize such third-party hosting entities to host, operate
and/or maintain such Products solely on behalf of Converge and the Converge
Subsidiaries as permitted hereunder.
2.11 Audit Rights. Each party (the "Auditing Party") shall have the
right reasonably to audit, at its expense, the compliance with this Agreement by
the other party (the "Audited Party") and its Subsidiaries (together with the
Audited Party, the "Auditees"), provided that such audit(s) shall be conducted
during normal business hours and in such a manner as not to unreasonably
interfere with the operations of the Auditees. Any such audit will be conducted
by accountants from a nationally recognized public accounting firm chosen and
engaged by the Auditing Party. If any such audit discloses substantial
unlicensed use of the Products, the Audited Party shall reimburse the Auditing
Party for the reasonable fees and other amounts payable by the Auditing Party to
the public accounting firm that conducts the audit. The Auditing Party shall use
the information obtained or observed in the audit solely for the purposes of (a)
determining whether the Auditees have sufficient license rights for their use of
the Products and are otherwise complying with the terms and conditions of this
Agreement respecting such use, and (b) enforcing its rights under this Agreement
and any applicable laws. All such information shall be treated as Confidential
Information of the Audited Party for purposes of this Agreement; provided,
however, that the Auditing Party may use such information as permitted under
clause (b) of the foregoing sentence. Each party shall require each of its
Subsidiaries to permit the other party to conduct the audits authorized
hereunder.
2.12 Notice to Users. Converge shall, and shall require the Converge
Subsidiaries to, use reasonable efforts to make all users of the Products
hereunder (including, without limitation, users of any Converge Marketplace that
are permitted to access or use the Products) aware that the Products (a) may
only be used subject to the terms and conditions contained in this Agreement and
the corresponding Documentation for such Products and (b) may not be copied,
transferred or otherwise used in violation of such terms and conditions.
2.13 No Implied Licenses. No license or other rights to the Products
or the Documentation are granted, by implication or otherwise, except as
expressly set forth in this Agreement.
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2.14 Maintenance & Support Services.
2.14.1 During the Product Term. Except as set forth in Section
2.14.2 or Section 2.14.3, Vert will provide Converge and the Converge
Subsidiaries with Maintenance & Support Services for all Products (excluding
Vert-Owned Deliverables) during the Product Term, and the cost of such services
is included in the amounts paid pursuant to Section 3.1.
2.14.2 Post-Product Term - No Remedy Election. In the event
the Product Term ends other than due to a Converge Remedy Election or a Vert
Remedy Election, Converge may purchase continued Maintenance & Support Services
for any individual Products (excluding Vert-Owned Deliverables) on a
year-by-year basis by paying Vert the then-standard fees for maintenance and
support for such Products that VNI or the applicable VNI Subsidiaries charge to
similarly situated licensees. In such circumstance, the Maintenance & Support
Services provided by Vert after the Product Term shall not include the right to
receive any Enhancements, unless such Enhancements are made generally available
as part Maintenance & Support Services provided to similarly situated licensees
of the Products in question.
2.14.3 Post-Product Term - Vert Remedy Election. In the event
the Product Term ends due to a Vert Remedy Election, Converge shall be entitled
to continued Maintenance & Support Services for any Deployed Products at no
additional cost for the remainder of the initial three-year period commencing on
the Effective Date. Thereafter, Converge may purchase continued Maintenance &
Support Services for any Deployed Products on a year-by-year basis by paying
Vert the then-standard fees for maintenance and support for such Deployed
Products that VNI or the applicable VNI Subsidiaries charge to similarly
situated licensees. In either of the foregoing circumstances, the Maintenance &
Support Services provided by Vert after the Product Term shall not include the
right to receive any Enhancements, unless such Enhancements are made generally
available as part Maintenance & Support Services provided to similarly situated
licensees of the Deployed Products in question.
2.14.4 Post-Product Term - Converge Remedy Election. In the
event the Product Term ends due to a Converge Remedy Election, Converge may
purchase continued Maintenance & Support Services for any Deployed Products on a
year-by-year basis by paying Vert the then-standard fees for maintenance and
support for such Deployed Products that VNI or the applicable VNI Subsidiaries
charge to similarly situated licensees. In such circumstance, the Maintenance &
Support Services provided by Vert for the remainder of the initial three-year
period following the end of the Product Term shall include the right to receive
Upgrades to Deployed Products, but not other Enhancements, unless such other
Enhancements are made generally available as part of the Maintenance & Support
Services provided to similarly situated licensees of the Deployed Products in
question. Thereafter, the Maintenance & Support Services shall not include the
right to receive any Enhancements, unless such other Enhancements are made
generally available as part Maintenance & Support Services provided to similarly
situated licensees of the Deployed Products in question.
2.15 Delivery and Acceptance. Vert will transfer the Products and
all Documentation by remote telecommunications from the Vert place of business,
to a Converge computer located in the State of California. If the Products and
Documentation cannot be delivered via remote telecommunications to a Converge
computer located in the State of
13
California, the Products and Documentation will be installed by Vert on the
Converge computer located in the State of California. Converge will not obtain
title or possession of any tangible personal property, including any storage
media, as a result of the delivery of any Product under this Agreement. All
Products and Documentation existing as of the Effective Date shall be delivered
to Converge within 30 days following the Effective Date. Other Products shall be
delivered to Converge (a) promptly following the date on which they are
available as a beta or other early release version (provided, however, that Vert
shall not be obligated to provide Maintenance & Support Services for such
pre-release versions, and such pre-release versions shall not be used in a
production environment without Vert consent) and (b) promptly following the date
on which they become generally available. Without exception, all Products
including, but not limited to, Updates and Enhancements shall be delivered to
Converge as they become generally available and in accordance with the delivery
procedure outlined in this Section 2.15. Each Product, Update and Enhancement
will be deemed accepted by Converge upon Converge's receipt of the complete
delivery to the Converge computer located in the State of California thereof.
2.16 Product List. Vert represents that Exhibit A, in the form
initially attached to this Agreement, is a reasonably complete and correct list
of all Products existing as of the Effective Date. Vert agrees to promptly amend
and update Exhibit A, from time to time, to reflect Future Products.
2.17 Promotion Efforts and Responsibilities. The parties will
participate in mutually acceptable joint promotional activities that may include
those of the type set forth in Exhibit D.
2.18 Marketplace Integration.
2.18.1 Converge Links and Converge Marks. Within 30 days after
the Effective Date and thereafter during the Product Term, Vert shall place a
Converge Link from each of VNI's "Industry Marketplaces" in the High Technology
Industry to any and all Converge Web Sites in a mutually agreed upon manner.
Converge hereby grants Vert a non-exclusive, non-transferable, royalty-free
right and license to (a) link to the Converge Web Sites through Converge Links
as described in this Section 2.18.1 and (b) use a Converge Xxxx(s) in connection
with such Link. Vert agrees to use the Converge Xxxx(s) in accordance with this
Agreement, with the trademark and usage guidelines of Converge in Exhibit F
hereto, and with good trademark practices, including, but not limited to,
protecting the value of the goodwill residing in such intellectual property.
2.18.2 Vert Links and Vert Marks. Within 30 days after the
Effective Date and thereafter during the Product Term, Converge shall place a
Vert Link from each Converge Web Site within the Converge Marketplace to any and
all of VNI's "Industry Marketplaces" in the High Technology Industry. Vert
hereby grants Converge a non-exclusive, non-transferable, royalty-free right and
license to (a) link to VNI's "Industry Marketplaces" in the High Technology
Industry through Vert Links as described in this Section 2.18.2 and (b) use a
Vert Xxxx in connection with (i) such Link and (ii) the promotion of certain
Products in connection with Exhibit D. Converge agrees to use the Vert Marks in
accordance with this Agreement, with the trademark usage guidelines of Vert in
Exhibit G hereto, and with good
14
trademark practices, including, but not limited to, protecting the value of the
goodwill residing in such intellectual property.
2.18.3 Integration. The parties will explore and pursue
further integration opportunities to link the Converge Marketplace with VNI's
"Industry Marketplaces" in the High Tech Industry.
2.18.4 Ownership of Vert Marks. Vert owns all right, title and
interest in and to the Vert Marks and all Intellectual Property Rights and
goodwill (including, but not limited to, goodwill accruing during the term of
this Agreement) associated therewith. Except for the express rights granted to
Converge under this Agreement, Converge acknowledges and agrees that the
Intellectual Property owned, acquired or developed by Vert (including all
Intellectual Property Rights associated therewith), including, but not limited
to the Vert Marks, is and shall remain the sole property of Vert and nothing in
this Agreement shall confer in Converge any right of ownership or license rights
in Vert's Intellectual Property (including all Intellectual Property Rights
associated therewith).
2.18.5 Ownership of Converge Marks. Converge owns all right,
title and interest in and to the Converge Marks and all Intellectual Property
Rights and goodwill (including, but not limited to, goodwill accruing during the
term of this Agreement) associated therewith. Except for the express rights
granted to Vert under this Agreement, VNI acknowledges and agrees that the
Intellectual Property owned, acquired or developed by Converge (including all
Intellectual Property Rights associated therewith), including, but not limited
to the Converge Marks, is and shall remain the sole property of Converge and
nothing in this Agreement shall confer in Vert any right of ownership or license
rights in Converge's Intellectual Property (including all Intellectual Property
Rights associated therewith).
2.19 Marketplace Protection Measures. Unless otherwise agreed upon
by the parties in writing, Converge shall implement and operate the Marketplace
Protection Measures for the Converge Web Site at xxx.xxxxxxxx.xxx within four
months following the Effective Date. With respect to any other Converge
Marketplace utilizing any Trading Functionality, unless otherwise agreed upon by
the parties in writing, Converge shall implement the applicable Marketplace
Protection Measures within three months following the date on which such Trading
Functionality is first utilized on such other Converge Marketplace in a
production environment. For so long as any Converge Marketplace continues to
utilize any Trading Functionality, Converge agrees to continue implementing and
operating all applicable Marketplace Protection Measures in all material
respects with respect to such Converge Marketplace.
3. Fees and Payments.
3.1 Fees for Products.
3.1.1 General. The fees for the license rights granted to the
Products and for Maintenance & Support Services to be provided during the
Product Term are set forth in Exhibit B hereto. Converge shall pay such fees to
VNS in accordance with the provisions of Exhibit B.
15
3.1.2 Converge Remedy Election. The only event that shall
relieve Converge of its obligation to pay the fees set forth in Exhibit B shall
be a Converge Remedy Election, which event shall relieve Converge of its
obligation to pay those fees set forth in Exhibit B that first become due and
payable after the Converge Remedy Election Date. For the sake of clarity,
Converge shall remain obligated to pay all fees set forth in Exhibit B that
become due on or before the Converge Remedy Election Date, but that have not
been paid by Converge on or before the Converge Remedy Election Date.
3.1.3 Vert Remedy Election. Notwithstanding the occurrence of
a Vert Remedy Election, Converge shall remain obligated to pay the full amount
of all fees set forth in Exhibit B, whether such fees become due before, on or
after the Vert Remedy Election Date.
3.2 On-Site Maintenance. Converge shall pay Vert's then-standard
charges for any on-site Maintenance & Support Services provided by Vert under
this Agreement. The amounts payable under this Section 3.2 shall be in addition
to the fees payable by Converge under Section 3.1.
3.3 Commissions Due to Converge. Commissions due to Converge with
respect to the joint promotional activities conducted under Exhibit D shall be
paid by VNS as set forth therein.
3.4 Payments. All payments will be made in U.S. dollars, without
setoff or deduction. Amounts due under Section 3.2 will be invoiced to Converge
by VNS. Payment of such invoiced amounts shall be due within 30 days of
Converge's receipt of invoice. All fees and other payments not paid when due
shall be subject to late charges of the lesser of (a) 1.5% per month of the
overdue amount or (b) the maximum permitted under applicable law.
3.5 Taxes.
3.5.1 Generally. The fees and other payments specified in this
Agreement are exclusive of any sales, use and other taxes on consumption of
goods and services ("Sales Taxes"), however designated or levied, based on this
Agreement, the delivery of the Products or services under this Agreement, or
Converge's or the Converge Subsidiaries' use thereof. In those jurisdictions in
which VNS determines it is required to register, collect and remit Sales Taxes,
VNS will separately invoice Converge for such Sales Taxes (which invoices shall
be payable by Converge as set forth in Section 3.4), collect such Sales Taxes
from Converge and remit such Sales Taxes to the proper taxing authority. In
those jurisdictions in which VNS has determined that it does not have a
collection responsibility, Converge will be required to self-assess and remit
any Sales Taxes due on the purchase of taxable property and services acquired
under this Agreement. Converge will retain ultimate responsibility and liability
for remitting any Sales Taxes due on the purchase of any property and/or
services acquired under this Agreement, including, without limitation, any
interest, penalties or additions attributable to or imposed on or with respect
to any such assessment excluding any taxes imposed upon the net income of either
party).
3.5.2 Certain Sales Taxes. The parties will cooperate and use
their commercially reasonable efforts to minimize or avoid, to the maximum
extent allowed by law,
16
the obligation to pay any Sales Taxes that may be levied on payments made under
this Agreement or otherwise are chargeable to or against VNS by any applicable
government authority with respect to the Services and the Deliverables. To that
end, the parties will conduct transactions using an electronic commerce approach
under which Vert will provide all Services (where applicable) and all
Deliverables to Converge using an electronic medium of delivery, electronically
via the Internet, by "drop and load" to an Converge computer from a CD-ROM that
is in the possession and control of Vert Personnel at all times, or in any other
mutually agreeable intangible form or by such other means as is mutually agreed
upon by the parties. Additionally, the parties will electronically transmit and
receive SOWs, invoices and other applicable documentation. Each party, at its
own expense, will provide and maintain the equipment, software, services and
testing necessary for it to transmit and receive such documentation. Any amount
of Sales Tax that legally could have been avoided but for the acts or omissions
of a party will be payable by that party. Sales Taxes that may not be avoided
will be payable (a) one-half by Converge and one-half by VNS if due to a US
federal, state or local taxing authority and (b) by Converge if due to a non-US
taxing authority. Taxes chargeable against the income or gross receipts of VNS
shall be paid by VNS. Taxes chargeable against the income or gross receipts of
Converge shall be paid by Converge.
3.6 Tax Withholding. If laws, rules or regulations require
withholding of any taxes imposed upon amounts payable to a party hereunder, the
other party shall make such withholding payments as required and subtract such
withholding payments from the amounts payable to such party. The other party
shall submit reasonable proof of payment of the withholding taxes to such party
within 30 days after obtaining such proof. The parties agree to fully cooperate
with each other, including, without limitation, in the filing of appropriate
certificates of tax exemption, to ensure that any withholding payments required
to be made by the other party are reduced or avoided to the fullest extent
permitted by law. Converge shall be deemed to be the sole payor of payments owed
to VNS under this Agreement and shall not have the right to substitute any
domestic or foreign affiliate for that purpose, and if Converge reincorporates
or otherwise reorganizes as a foreign person that would thereupon cause payments
hereunder to VNS to become subject to withholding, then Converge shall comply
with applicable laws to the extent required and shall gross up the payments
otherwise owed to VNS so that VNS receives, net of withholding taxes, the
amounts VNS would have received if Converge had not substituted a foreign person
or had remained a domestic person.
3.7 Most Favored Nation. If at any time following the Product Term,
Converge purchases software product(s) and/or maintenance & support services
(including, but not limited to, Maintenance & Support Services purchased
pursuant to Section 2.4), the provisions of this Section 3.7 shall apply.
Notwithstanding anything to the contrary herein, all fees, charges and rates
charged or invoiced by Vert in connection with such software products and
maintenance & support services shall be as low as or lower than the fees,
charges and rates charged or invoiced at the relevant time by Vert to any of its
other similarly situated customers for software products or for maintenance &
support services of the same or a substantially similar nature.
17
4. Warranty.
4.1 Scope of Warranty. Vert warrants that for the shorter of six
months after receipt by Converge of each Product (which for purposes of this
Section 4.1, shall include Enhancements to existing Products, but not Updates to
such Products) or 90 days after the date of deployment of the Product by
Converge in a production environment (the "Warranty Period") such Product, as
delivered by Vert to Converge, will be free from Errors, provided that such
Product has not been modified by Converge or any third party. In the event that
a Problem occurs with respect to a Product, which Problem is attributable to an
Error, and provided that Converge reports such Problem to Vert within the
Warranty Period, Vert, as its sole obligation and Converge's sole and exclusive
remedy, shall respond to such Problem and correct any associated Errors, subject
to and in accordance with the provisions of Exhibit C. The warranty set forth in
this Section 4.1 shall not apply with respect to Vert-Owned Deliverables, which
shall be warranted, if at all, as set forth in the Professional Services
Agreement, nor shall the warranty set forth in this Section 4.1 apply to any
beta or other early release versions of Products provided to Converge under
Section 2.15.
4.2 Disclaimer. WITH THE EXCEPTION OF THE EXPRESS WARRANTY PROVIDED
IN SECTION 4.1 AND THE INDEMNITY PROVIDED IN SECTION 8, VNI AND ALL AFFILIATES
OF VNI SPECIFICALLY DISCLAIM ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT OF THIRD PARTY RIGHTS RELATING TO
THE PRODUCTS AND ANY SERVICES FURNISHED OR OTHERWISE PROVIDED HEREUNDER, IF ANY.
IN ADDITION, ALL BETA OR OTHER EARLY RELEASE VERSIONS OF PRODUCTS PROVIDED TO
CONVERGE UNDER SECTION 2.15 ARE PROVIDED BY VNI AND ALL AFFILIATES OF VNI "AS
IS" AND "WITH ALL FAULTS" AND VNI AND ALL AFFILIATTES OF VNI DISCLAIM ANY AND
ALL WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT THERETO.
5. Proprietary Rights. The Products and the Documentation are
protected by applicable copyright and other intellectual property laws and
international treaty provisions. As between Vert and Converge, but subject to
any contrary provisions in the Professional Services Agreement with respect to
Deliverables (as defined therein) provided thereunder, and to the rights and
licenses granted to Converge hereunder, Vert and its licensors own all right,
title and interest (including but not limited to all copyrights, patents,
trademarks, trade names and trade secrets and other proprietary rights) in and
to the Products and the Documentation. Converge agrees to reproduce all
copyright, trademark and other proprietary notices contained on or in the
Products or the Documentation, as delivered to Converge, on all copies thereof,
and Converge further agrees not to remove or obscure any such notices. Except as
expressly set forth in this Agreement or the Professional Services Agreement,
Converge acknowledges and agrees that Vert has no obligation to deliver Source
Code under the terms of this Agreement, or to grant Converge any license to use
the Source Code form of the Products. Except as expressly permitted hereunder,
the Products are not to be licensed, sold, rented, leased or otherwise
transferred by Converge. Converge agrees not to (a) decompile, reverse engineer
or disassemble or otherwise attempt to reconstruct or discover any Source Code
or underlying algorithms of the Products that are provided solely in Object Code
form or (b) separate or disassociate any
18
component parts of the Products (it being understood that this restriction shall
not restrict Converge from separating or disassociating separately identified
modules from Products containing them). Except as expressly set forth in this
Agreement and in the Professional Services Agreement, Converge shall not modify
or change the Products or the Documentation (except to configure the Products by
means of their user-enabled features) in any manner, nor may Converge create any
derivative works of the Products or the Documentation. The provisions of this
Section 5 shall apply equally to the Converge Subsidiaries and Converge shall
ensure that any Converge Subsidiaries provided with access to or use of the
Products are bound thereby.
6. Source Code Escrow.
6.1 Escrow Materials. Within 30 days following the Effective Date,
the parties shall put in place a mutually acceptable escrow agreement pursuant
to which Vert shall place in escrow with Fort Xxxx or other escrow agent
mutually agreeable to the parties (the "Escrow Agent") true and complete copies
of the Source Code for the Products (including, with respect to Trade Secret
Modules, either the Source Code for such Trade Secret Modules or their
corresponding API Documentation, with the understanding that Vert may remove the
Source Code for any Trade Secret Module from escrow at the time it places its
corresponding API Documentation into escrow) owned by VNI or any of the VNI
Subsidiaries and existing as of the Effective Date. Promptly following the date
on which any other Product, Update or Enhancement owned by VNI or any the VNI
Subsidiaries becomes generally available, or any Vert-Owned Deliverable is
provided to Converge under the Professional Services Agreement, but in any event
at least once per calendar quarter, Vert shall deliver to the Escrow Agent the
Source Code for such other Products, Updates, Enhancements and Vert-Owned
Deliverables (including, with respect to Trade Secret Modules, either the Source
Code for such Trade Secret Modules or their corresponding API Documentation,
with the understanding that Vert may remove the Source Code for any Trade Secret
Module from escrow at the time it places its corresponding API Documentation
into escrow). All of the foregoing materials delivered by Vert to the Escrow
Agent are referred to herein as the "Escrow Materials."
6.2 Release Events. For purposes of this Agreement, the following
shall be deemed "Release Events": (a) VNI becomes insolvent, files for
bankruptcy or is subjected to involuntary bankruptcy proceedings that are not
dismissed within 60 days, or makes a general assignment for the benefit of its
creditors; (b) Vert ceases to offer any maintenance services for a Product; or
(c) Converge makes a Priority Remedy Election. Notwithstanding anything to the
contrary herein, if the claimed Release Event is under clause (b) or clause (c)
above, only the Escrow Materials for the Product that is the subject of the
Release Event, together with all associated Updates and Enhancements, shall be
subject to release to Converge hereunder.
6.3 Delivery of Escrow Materials. Should Converge desire to obtain
any Escrow Materials due to the occurrence of a Release Event, Converge shall
provide Vert and the Escrow Agent with written notice thereof. The Escrow Agent
shall be instructed to promptly provide a copy of such notice to Vert. Unless
the Escrow Agent receives written notice from Vert contesting the occurrence of
such Release Event within 15 days after Vert receives such copy of Converge's
notice (48 hours in the event the Release Event is a Priority Remedy Election by
Converge), the Escrow Agent shall be instructed to deliver the relevant Escrow
19
Materials to Converge forthwith. In the event Vert contests the occurrence of
the Release Event, the matter shall be resolved as expeditiously as possible in
accordance with the dispute resolution provisions of the Escrow Agreement and
the Escrow Materials shall remain in escrow until such time as the matter is
resolved.
6.4 Fees of Escrow Agent. Converge shall pay all fees and other
amounts payable to the Escrow Agent under the Escrow Agreement.
6.5 Escrow of Third-Party Products. With respect to Products that
are licensed to VNI or the VNI Subsidiaries by third parties, Vert will
reasonably cooperate with Converge to arrange for true and complete copies of
the Source Code for such Products to be deposited with the Escrow Agent and to
be held in escrow in accordance with the provisions of this Section 6 and the
Escrow Agreement.
6.6 Loss of Rights to Source Code. Should Vert cure a Priority Event
of Default by effectuating a Cataclysmic Event Cure with respect to the
Cataclysmic Event giving rise thereto prior to a Priority Remedy Election, then:
(i) the rights of Converge under Section 2.4.1 to use, load, store, transmit,
execute, distribute internally, display, modify and have modified, and make and
have made derivative works of, the Source Code delivered to Converge under this
Section 6 by reason of such Priority Event of Default shall automatically cease;
(ii) Converge shall erase, destroy or return to the Escrow Agent all such Source
Code, together with all copies, modifications and derivative works thereof; and
(iii) upon Vert' written request, shall certify its compliance with this Section
6.6 to Vert in writing.
7. Limitation of Liability.
7.1 Disclaimer of Certain Damages. TO THE MAXIMUM EXTENT PERMITTED
BY LAW, IN NO EVENT SHALL EITHER PARTY BE LIABLE OR OBLIGATED IN ANY MANNER FOR
ANY SPECIAL, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES OF ANY KIND ARISING
OUT OF OR RELATING TO THIS AGREEMENT (INCLUDING, BUT NOT LIMITED TO, LOST
PROFITS, REVENUES OR BUSINESS OPPORTUNITIES) HOWEVER CAUSED AND REGARDLESS OF
THE FORM OF ACTION, WHETHER IN CONTRACT, TORT, NEGLIGENCE, STRICT PRODUCT
LIABILITY, OR OTHERWISE, EVEN IF THE PARTY HAS BEEN INFORMED OF THE POSSIBILITY
OF ANY SUCH DAMAGES IN ADVANCE. VERT DOES NOT GUARANTEE THAT THE PRODUCTS WILL
OPERATE WITHOUT ERROR OR INTERRUPTION AND VERT SHALL NOT BE RESPONSIBLE FOR ANY
DAMAGES ASSOCIATED WITH LOSS OF DATA OR INTERRUPTION OR LOSS OF USE OF PRODUCTS
RESULTING THEREFROM.
7.2 Sole Remedy. IF A CLAIM OR CAUSE OF ACTION IS ATTRIBUTABLE TO A
PRODUCT OR ANY SERVICES PROVIDED UNDER THIS AGREEMENT (BUT EXCLUDING ANY
VERT-OWNED DELIVERABLES), THE REMEDIES SET FORTH IN THIS AGREEMENT, TO THE
EXCLUSION OF THE REMEDIES SET FORTH IN THE PROFESSIONAL SERVICES AGREEMENT,
SHALL CONSTITUTE THE SOLE AND EXCLUSIVE REMEDIES AVAILABLE TO A PARTY FOR SUCH
CLAIM OR CAUSE OF ACTION. IF A CLAIM OR CAUSE OF ACTION IS
20
ATTRIBUTABLE TO A DELIVERABLE OR ANY SERVICES PROVIDED UNDER THE PROFESSIONAL
SERVICE AGREEMENT (EXCLUDING ANY UNDERLYING PRODUCTS (OTHER THAN VERT-OWNED
DELIVERABLES) INCLUDED IN SUCH DELIVERABLES), THE REMEDIES SET FORTH IN THE
PROFESSIONAL SERVICES AGREEMENT, TO THE EXCLUSION OF THE REMEDIES SET FORTH IN
THIS AGREEMENT, SHALL CONSTITUTE THE SOLE AND EXCLUSIVE REMEDIES AVAILABLE TO A
PARTY FOR SUCH CLAIM OR CAUSE OF ACTION. NO LIABILITY SHALL EXTEND UNDER THIS
AGREEMENT TO ANY THIRD PARTY (INCLUDING, BUT NOT LIMITED TO, ANY AFFILIATES OF
VNI OTHER THAN VNS, OR THEIR LICENSORS) IF NOT INVOLVED IN THE DEVELOPMENT,
LICENSING OR DELIVERY OF THE PRODUCTS OR ANY SERVICES HEREUNDER.
7.3 Maximum Aggregate Liability. TO THE MAXIMUM EXTENT PERMITTED BY
LAW, THE MAXIMUM LIABILITY OF EACH PARTY TO THE OTHER OR TO ANY THIRD PARTY FOR
DAMAGES RELATING TO THIS AGREEMENT OR THE PRODUCTS OR SERVICES, IF ANY, THAT ARE
THE SUBJECT MATTER OF THIS AGREEMENT, WHETHER FOR BREACH OF CONTRACT OR
WARRANTY, STRICT LIABILITY, NEGLIGENCE OR OTHER TORT, STRICT PRODUCT LIABILITY,
THE FAILURE OF ANY LIMITED REMEDY TO ACHIEVE ITS ESSENTIAL PURPOSE, OR
OTHERWISE, SHALL NOT EXCEED: (I) $10,000,000 IN THE AGGREGATE, AND (II) THE
GREATER OF $1,000,000 PER PRODUCT OR THE LIST PRICE OF SUCH PRODUCT AS OF THE
DATE ON WHICH THE CLAIM OR CAUSE OF ACTION FIRST AROSE. THE FOREGOING
LIMITATIONS ON EACH PARTY'S AGGREGATE LIABILITY TO THE OTHER SHALL BE IN
ADDITION TO ANY FEES AND OTHER AMOUNTS DUE AND OWING UNDER SECTION 3.
7.4 Exceptions. THE LIMITATIONS OF LIABILITY CONTAINED IN THIS
SECTION 7 SHALL NOT APPLY WITH RESPECT TO (A) ANY CLAIMS OF BODILY INJURY OR
DAMAGE TO TANGIBLE PERSONAL PROPERTY RESULTING FROM WILLFUL MISCONDUCT OR GROSS
NEGLIGENCE, (B) THE RESPECTIVE INDEMNIFICATION OBLIGATIONS OF THE PARTIES UNDER
SECTION 8, (C) ANY BREACH OF THE PROVISIONS GOVERNING LICENSE RIGHTS AND
RESTRICTIONS IN SECTION 2, (D) ANY BREACH OF THE CONFIDENTIALITY OBLIGATIONS IN
SECTION 9, OR (E) LIABILITY FOR PAYMENT OF INTEREST ADDED BY A COURT OF LAW OR
AN ARBITRATION PANEL TO A JUDGMENT ENTERED IN ANY ACTION OR PROCEEDING UNDER
THIS AGREEMENT.
7.5 Duty to Mitigate. Each party will have a duty to take reasonable
steps to mitigate damages for which the other party is responsible.
7.6 Acknowledgement. Each of the parties acknowledge that the
disclaimers and limitations set forth in this Section 7 are an essential element
of this Agreement between the parties and that the parties would not have
entered into this Agreement without such disclaimers and limitations.
21
8. Indemnification.
8.1 By Vert.
8.1.1 Vert Indemnity. Vert agrees to defend and hold Converge
and its officers, directors, employees and agents harmless from and against any
suit, claim or action by any unaffiliated third party (a "Converge Claim")
alleging that any of the Products, when used within the scope of this Agreement
and its corresponding Documentation, infringe upon or misappropriate any U.S.
patent, European Union Office patent, patent of a country in the European Union,
copyright or trade secret of a third party. Vert further agrees to indemnify
Converge and its officers, directors, employees and agents for any damages,
costs, liabilities, expenses (including, without limitation, attorneys fees) and
settlement amounts payable to unaffiliated third parties in connection with such
Converge Claims. The foregoing obligations shall not extend to any Converge
Claims arising out of or related to (a) a modification of the Products by or at
the direction of anyone other than Vert, to the extent that such modification is
the cause of such infringement; (b) a combination of the Products with any third
party software or equipment neither recommended, approved or authorized by Vert
in writing, whether in any Documentation for the Product or otherwise, to the
extent that such combination is the cause of such infringement; (c) portions of
the Products based on unique specifications or requirements provided or selected
by Converge, to the extent that such portion is the cause of such infringement;
or (d) solely with respect to infringement claims concerning U.S. patent,
European Union Office patent or patent of a country in the European Union, any
infringement claims to the extent based on or arising out of Future Products.
For the purposes of this Section 8.1, the term "Products" shall exclude the
Vert-Owned Deliverables.
8.1.2 Converge Obligation. Vert's obligations to defend,
indemnify and hold Converge harmless are subject to Converge (a) giving Vert
prompt written notice of any such Converge Claim; (b) giving Vert sole control
over the defense and settlement of any such Converge Claim; (c) providing full
cooperation for the defense of any such Converge Claim, at Vert's expense; and
(d) not entering into any settlement or compromise of any such Converge Claim
without Vert's prior written approval.
8.1.3 Mitigation. If Converge is enjoined or is reasonably
likely to be enjoined from using any Products as permitted hereunder, Vert will,
at its own expense, exercise the first of the following remedies that is
practicable: (i) obtain for Converge the right to continue to use, sell and
license the Products as permitted under this Agreement; (ii) modify Products so
they are non-infringing and functionally equivalent in all material respects to
the infringing Products; or (iii) replace the Products, or other affected
Products, with non-infringing ones that are functionally equivalent in all
material respects to the infringing Services and Deliverables; provided,
however, that Vert may seek to provide the remedies in (ii) or (iii) above prior
to seeking to provide the remedy in (i) above only if such decision would not
have a significant adverse impact on Converge's ability to provide uninterrupted
products or services to its customers; provided, however, that with respect to
infringement claims concerning U.S. patents, European Union Office patents or
patents of a country in the European Union, Vert shall in no event be required
to incur costs or expenses in excess of $1,000,000, in the aggregate and
regardless of the number of claims involved, in performing its obligations under
this Section 8.1.3. If all of the remedies set forth in the preceding sentence
are neither technically feasible
22
nor available on commercially reasonable terms, then Vert may, or if the
following remedy is requested by Converge, then Vert shall, require the return
of the affected Deliverables and pay to Converge the list price charged by Vert
for such Products.
8.1.4 Sole Remedy. IF A CLAIM OR CAUSE OF ACTION RELATING TO
THE INFRINGEMENT OR MISAPPROPRIATION OF ANY PATENT, COPYRIGHT, TRADE SECRET OR
OTHER INTELLECTUAL PROPERTY RIGHT IS ATTRIBUTABLE TO A PRODUCT (BUT EXCLUDING
ANY VERT-OWNED DELIVERABLES), THE REMEDIES SET FORTH IN THIS SECTION 8, TO THE
EXCLUSION OF THE REMEDIES SET FORTH IN THE PROFESSIONAL SERVICES AGREEMENT,
SHALL CONSTITUTE THE SOLE AND EXCLUSIVE REMEDIES AVAILABLE TO CONVERGE FOR SUCH
CLAIM OR CAUSE OF ACTION. IF A CLAIM OR CAUSE OF ACTION RELATING TO THE
INFRINGEMENT OR MISAPPROPRIATION OF ANY PATENT, COPYRIGHT, TRADE SECRET OR OTHER
INTELLECTUAL PROPERTY RIGHT IS ATTRIBUTABLE TO A DELIVERABLE OR ANY SERVICES
PROVIDED UNDER THE PROFESSIONAL SERVICE AGREEMENT (EXCLUDING ANY UNDERLYING
PRODUCTS (OTHER THAN VERT-OWNED DELIVERABLES) INCLUDED IN SUCH DELIVERABLES),
THE REMEDIES SET FORTH IN THE PROFESSIONAL SERVICES AGREEMENT, TO THE EXCLUSION
OF THE REMEDIES SET FORTH IN THIS AGREEMENT, SHALL CONSTITUTE THE SOLE AND
EXCLUSIVE REMEDIES AVAILABLE TO CONVERGE FOR SUCH CLAIM OR CAUSE OF ACTION.
8.2 By Converge.
8.2.1 Converge Indemnity. Converge agrees to defend and hold
Vert and its officers, directors, employees and agents harmless from and against
any suit, claim or action by any unaffiliated third party (a "Vert Claim")
relating to (a) the operation of and/or business conducted on or through any
Converge Marketplace, except to the extent that the occurrence giving rise to
such Vert Claim is a suit, claim or action by any unaffiliated third party
alleging that any Product, when used within the scope of the rights granted to
Converge under this Agreement, infringes upon or misappropriates any U.S. or
foreign patent copyright, trade secret or other intellectual property rights of
a third party; (b) the use of any Product outside the scope the rights granted
to Converge under this Agreement; or (c) any claim associated with any Converge
product or service to the extent not based on Products or service provided by
Vert hereunder. Converge further agrees to indemnify Vert and its officers,
directors, employees and agents for any damages, costs, liabilities, expenses
(including, without limitation, attorneys fees) and settlement amounts payable
to unaffiliated third parties in connection with such Vert Claims.
8.2.2 Vert Obligation. Converge's obligations to defend,
indemnify and hold harmless Vert are subject to Vert (a) giving Converge prompt
written notice of any such Vert Claim; (b) giving Converge sole control over the
defense and settlement of any such Vert Claim; (c) providing full cooperation
for the defense of any such Vert Claim, at Converge's expense; and (d) not
entering into any settlement or compromise of any such Vert Claim without
Converge's prior written approval.
23
9. Confidential Information.
9.1 Definition of Confidential Information. "Confidential
Information" as used in this Agreement shall mean any and all proprietary or
non-public information of a party (including, without limitation, any Source
Code furnished by or to Converge hereunder) whether in oral, written or other
tangible form that the party disclosing the information (the "Discloser")
designates as being confidential or which, under the circumstances surrounding
disclosure, the receiving party (the "Recipient") knows or has reason to know
should be treated as confidential.
9.2 Nondisclosure and Nonuse Obligations. Each of the parties, as
Recipient, agrees that such Recipient will not use, disseminate, or in any way
disclose any Confidential Information of the other party, as Discloser, to any
person, firm or business, except to the extent necessary for the performance of
such party's obligations or the enjoyment of such party's rights and benefits
hereunder, and for any other purpose such Discloser may hereafter authorize in
writing. Each of the parties, as Recipient, agrees that such Recipient shall
treat all Confidential Information of the other party, as Discloser, with the
same degree of care as such Recipient accords to such Recipient's own
Confidential Information, but in no case less than reasonable care. Each of the
parties, as Recipient, agrees that such Recipient shall disclose Confidential
Information of the other party, as Discloser, only to those of such Recipient's
employees who need to know such information, and such Recipient certifies that
such Recipient employees have previously agreed, either as a condition to
employment or in order to obtain the Confidential Information of the Discloser,
to be bound by terms and conditions substantially similar to those terms and
conditions applicable to such Recipient under this Agreement. Each of the
parties, as Recipient, shall immediately give notice to the other party, as
Discloser, of any unauthorized use or disclosure of Discloser's Confidential
Information. Each of the parties, as Recipient, agrees to assist the other
party, as Discloser, in remedying any such unauthorized use or disclosure of
Discloser's Confidential Information.
9.3 Exclusions from Nondisclosure and Nonuse Obligations. The
obligations under this Section 9 of each of the parties, as Recipient, with
respect to any portion of the Confidential Information of the other party, as
Discloser, shall not apply to such portion that Recipient can document: (a) was
in the public domain at or subsequent to the time such portion was communicated
to Recipient by Discloser through no fault of Recipient; (b) was rightfully in
Recipient's possession free of any obligation of confidence at or subsequent to
the time such portion was communicated to Recipient by Discloser; (c) was
developed by employees or agents of Recipient independently of and without
reference to any information communicated to Recipient by Discloser; or (d) was
communicated by Discloser to an unaffiliated third party free of any obligation
of confidence. A disclosure by either of the parties, as Recipient, of
Confidential Information of the other party, as Discloser, either (i) in
response to a valid order by a court or other governmental body; (ii) as
otherwise required by law; or (iii) as necessary to establish the rights of
either party under this Agreement, shall not be considered to be a breach of
this Agreement by Recipient or a waiver of confidentiality for other purposes;
provided, however, that Recipient shall provide prompt prior written notice
thereof to Discloser to enable Discloser to seek a protective order or otherwise
prevent such disclosure.
9.4 Confidentiality of this Agreement. The parties hereto agree to
keep the terms of this Agreement confidential and not to divulge any part
thereof to any third party
24
except: (a) with the prior written consent of the other party; (b) to any
governmental body having jurisdiction to request and to read the same; (c) as
otherwise may be required by law or legal process; or (d) to legal counsel
representing either party. Notwithstanding the foregoing, no disclosure of this
Agreement shall be made pursuant to clauses (b) or (c) of the foregoing sentence
without the disclosing party first giving the other party reasonable notice
prior to the intended disclosure so as to allow the other party sufficient time
to seek a protective order or otherwise assure the confidentiality of this
Agreement as that other party shall deem appropriate. Each party agrees not to
file this Agreement as an exhibit to its SEC filings without first redacting and
requesting confidential treatment for any information reasonably considered by
the other party to be confidential. Such other party shall inform the first
party of any such information it wishes to redact and request confidential
treatment for within five Business Days following the date such other party is
requested to do so in writing. Nothing herein shall prohibit either party from
complying with applicable securities or other laws, rules or regulations.
10. Term; Events of Default; and Remedies.
10.1 Term. The term of this Agreement shall commence upon the
Effective Date and continue in perpetuity.
10.2 Events of Default. The occurrence of any one or more of the
following acts, events or occurrences shall constitute an "Event of Default"
under this Agreement: (a) either party becomes insolvent, files for bankruptcy
or is subjected to involuntary bankruptcy proceedings that are not dismissed
within 60 days, or makes a general assignment for the benefit of its creditors;
(b) either party breaches any material provision of this Agreement (excluding
(i) a breach by either party of the provisions of Section 2.17 or Exhibit D
hereto, which may not result in an "Event of Default," and (ii) a payment breach
by Converge of the type described in clause (c) below, which is covered by such
clause (c)) and the result is that the non-breaching party experiencing a
substantial deprivation of the benefits to which the non-breaching party is
entitled under this Agreement, which material breach is not cured by the
breaching party within 45 days after the breaching party's receipt of the
non-breaching party's written notice specifying the breach in detail; provided,
however, that if the breach is of such a nature that it may be cured, but it may
not reasonably be cured within such 45-day period, the non-breaching party may
not terminate this Agreement unless such breach is not cured by the breaching
party on or before the 90th day after the breaching party's receipt of the
non-breaching party's notice of breach if breaching party has commenced
substantial efforts to cure the breach within the initial 45-day period and has
continued in good faith to work to cure the breach as soon as reasonably
practicable thereafter, or (c) Converge fails to pay when due any amounts
payable under Section 3.1 and Exhibit B hereto and fails to cure such breach
within 10 Business Days after Vert gives Converge written notice specifying the
breach.
10.3 Remedies.
10.3.1 Remedies of Vert. Immediately upon the occurrence of an
Event of Default by Converge under Section 10.2, Vert shall have the right, but
not the obligation, to make a "Vert Remedy Election," exercisable by delivering
written notice thereof to Converge within 10 Business Days after the occurrence
of such Event of Default by Converge. Vert shall
25
not have the right to terminate this Agreement upon the occurrence of an Event
of Default by Converge under Section 10.2 or any other breach by Converge under
this Agreement.
10.3.2 Remedies of Converge. Immediately upon the occurrence
of an Event of Default by Vert under Section 10.2, Converge shall have the
right, but not the obligation, to make a "Converge Remedy Election," exercisable
by delivering written notice thereof to Vert within 10 Business Days after the
occurrence of such Event of Default by Vert. Converge shall not have the right
to terminate this Agreement upon the occurrence of an Event of Default by Vert
under Section 10.2 or any other breach by Vert under this Agreement.
10.4 Cataclysmic Event.
10.4.1 Notice and Response. Should a Cataclysmic Event occur,
Converge shall provide Vert with notice thereof as immediately as possible (a
"Cataclysmic Event Notice"). Each Cataclysmic Event Notice shall be provided to
Vert via telephone, pager and e-mail in accordance with VNS' Maintenance &
Support procedures for the reporting of a Severity Level 1 Problem, and the
Converge Tech Support representative or other Converge Personnel reporting the
Cataclysmic Event shall indicate to VNS that they are reporting a Severity Level
1 Problem. Vert shall respond to a Cataclysmic Event Notice and seek to provide
a Cataclysmic Event Cure in accordance with the provisions of Exhibit C
respecting Severity Level 1 Problems.
10.4.2 Efforts of Converge. Converge shall fully cooperate
with and assist Vert, as reasonably requested by Vert, in Vert's efforts to
characterize and diagnose the cause of any Cataclysmic Event and to effectuate a
Cataclysmic Event Cure with respect thereto. Without limiting the foregoing, at
any point when the Converge Marketplace is experiencing an interruption in Trade
Functionality, Converge shall use best efforts to restore such functionality to
the Converge Marketplace as soon as possible, such efforts to be in coordination
with Vert's efforts to effectuate a Cataclysmic Event Cure. Converge's efforts
under this Section 10.4.2, at a minimum, shall include implementing all
applicable Marketplace Response Procedures as immediately as practicable.
10.4.3 Priority Event of Default. In the event that a
Cataclysmic Event Cure is not effectuated within three days (72 hours) following
its corresponding Response Initiation Date/Time, Vert shall be in default of its
obligations under this Agreement (a "Priority Event of Default"). Should a
Cataclysmic Event Cure for such Priority Event of Default not be effectuated
within 11 days (264 hours) following the occurrence of such Priority Event of
Default, Converge shall have the right, but not the obligation, to make a
"Priority Remedy Election," exercisable by delivering written notice thereof to
Vert within 10 Business Days after the occurrence of such Priority Event of
Default. Converge shall not have the right to terminate this Agreement upon the
occurrence of a Priority Event of Default hereunder. For purposes of the
provisions of this Agreement other than those set forth in Section 10.2 and
Section 10.3, the consequences of a Priority Remedy Election by Converge shall
be the same as the consequences of a Converge Remedy Election by Converge,
unless otherwise expressly stated in this Agreement.
26
10.4.4 Tolling. The time periods specified in Section 10.4.3,
Section 10.4.5 and Section 6.6 shall be tolled for any time during which
Converge substantially fails to comply with its obligations under Section 10.4.2
to implement the applicable Marketplace Response Procedures.
10.4.5 Payments by Vert. In the event that Vert does not
effectuate a Cataclysmic Event Cure by the end of the third day (72nd hour)
following its corresponding Response Initiation Date/Time, Vert shall pay
Converge as liquidated damages, with respect to monetary claims, and without
limiting Converge's right to make a Priority Remedy Election (with such
liquidated damages and Priority Remedy Election being Converge's sole remedies
in connection with such Cataclysmic Event so long as this Section 10.4 applies),
the following amounts, depending on the length of time that such failure
continues:
Length of Failure to Effectuate a Cataclysmic Event Cure (from the
Response Initiation Date/Time) Amount of Payment
3 days (72 hours) $100,000
4 days (96 hours) $100,000
5 days (120 hours) $200,000
6 days (144 hours) $200,000
7 days (168 hours) $400,000
8 days (192 hours) $400,000
9 days (216 hours) $800,000
10 days (240 hours) $800,000
11 days (264 hours) $1,600,000
12 days (288 hours) $1,600,000
13 days (312 hours) $3,200,000
Such payments shall be made within 30 days following the date on which the total
amount due under this Section 10.4.5 with respect to the Cataclysmic Event in
question becomes fixed.
10.4.6 Trigger Events. Notwithstanding anything to the
contrary in this Section 10.4, the provisions of this Section 10.4 shall not
apply with respect to any Converge Marketplace that is the subject of a
Cataclysmic Event unless and until a Trigger Event has occurred with respect to
such Converge Marketplace. Furthermore, the amounts payable by Vert to Converge
under Section 10.4.5 above with respect to a particular Converge Marketplace
shall be reduced as follows: (i) by 66 2/3% if the Cataclysmic Event occurs
during the initial four month period commencing on the date that the first
Trigger Event for such Converge Marketplace occurs, and (ii) by 33 1/3% if the
Cataclysmic Event occurs during the four month period commencing on the first
day of the fifth month after such date.
10.4.7 Limitation on Priority Remedy Election. The provisions
of this Section 10.4 shall not apply, and Converge shall not be entitled to
provide a Cataclysmic Event Notice or make a Priority Remedy Election at any
time subsequent to the date on which Converge makes a Converge Remedy Election
or a Priority Remedy Election, or the date on which Vert makes a Vert Remedy
Election. The provisions of this Section 10.4 shall be Converge's sole remedy in
the event this Section 10.4 applies. In addition, the provisions of this
27
Section 10.4 shall apply subsequent to the Product Term only (i) with respect to
those Products for which Converge is then purchasing Maintenance & Support
Services and (ii) if Converge is then paying for Maintenance & Support Services
at an annualized rate of at least $1,750,000 per year.
11. Effect of Remedy Election. Upon the occurrence of a Vert Remedy
Election or a Converge Remedy Election, each party shall erase, destroy or
return to the other party all copies of the Confidential Information of or
provided by such party (which in the case of Converge as the erasing, destroying
or returning party shall include the Products and the Documentation), and, upon
such other party's written request, shall certify its compliance with this
Section 11 to the other party in writing. Notwithstanding the foregoing
provisions of this Section 11, with respect to and for so long as any licenses
granted to Converge respecting Products and/or Source Code survive a Vert Remedy
Election or a Converge Remedy Election, Converge shall not be required to erase,
destroy or return any Confidential Information of VNI or any of the VNI
Subsidiaries respecting such Products and/or Source Code.
12. Compliance with U.S. Export Laws. Converge acknowledges that the laws
and regulations of the United States may restrict the export and re-export of
commodities and technical data of United States origin, including the Products
and the Documentation in any medium. Each party agrees that it will not export
or re-export the Products or the Documentation in any form without the
appropriate United States and foreign government licenses.
13. Publicity. Neither party will issue any press release, marketing or
similar materials discussing this Agreement or either party's performance
hereunder except with the other party's prior written agreement to the content
and distribution of such material. Within 60 days after the Effective Date, the
parties may mutually agree upon a joint marketing program. Notwithstanding the
foregoing, Vert will be entitled to list Converge as a customer of Vert and as a
reference without submitting such lists to Converge. Converge will provide Vert
with a mutually agreed upon name (and contact information) for an employee of
Converge who will accept reference calls.
14. General.
14.1 Termination and Survival. This Agreement and all rights and
licenses granted herein may be terminated only upon written agreement of the
parties. Upon any such termination, Section 1, Section 2.11, Section 4.2,
Section 5, Section 7, Section 8, Section 9, Section 12, Section 13 and Section
14 shall survive.
14.2 Notices. All notices permitted or required under this Agreement
("Notices") shall be in writing and shall be delivered as follows with notice
deemed given as indicated (a) by personal delivery when delivered personally;
(b) by overnight courier upon written verification of receipt; or (c) by
certified or registered mail, return receipt requested, five days after deposit
in the mail. All Notices shall be properly addressed as follows, or to such
other addresses as may be specified in a Notice given hereunder:
28
If to VNI: with a copy to:
Attn: Chief Executive Officer Attn: General Counsel
VerticalNet, Inc. VerticalNet, Inc.
000 Xxxxxxx Xxxx, Xxxxx 000 000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxxx 00000 Xxxxxxx, Xxxxxxxxxxxx 00000
If to VNS: with a copy to:
Attn: Xxxxx Xxxxx, V.P. Enterprise Solutions Attn: General Counsel
VerticalNet Solutions Tradeum, Inc. dba VerticalNet Solutions
000 Xxxxxx Xxxxxx 000 Xxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000 Xxxxxxx, Xxxxxxxxxxxx 00000
If to Converge: with a copy to:
Attn: EVP, Product Strategy & Development Attn: General Counsel
Converge, Inc. Converge, Inc.
00000 Xxxxxxxxx Xxxxx, Xxxxx 000 00000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000-0000 Xxxxxxxxx, XX 00000-0000
14.3 Force Majeure. Except for the obligation to pay monies due,
neither party shall be liable hereunder by reason of any failure or delay in the
performance of its obligations hereunder (except for the payment of money) on
account of strikes, riots, insurrection, fires, flood, storm, explosions, acts
of God, war, governmental action, labor conditions, earthquakes, or any other
cause which is beyond the control of such party.
14.4 Waiver. An effective waiver under this Agreement must be in
writing signed by the party waiving its right. The failure of either party to
require performance by the other party of any provision hereof shall not affect
the full right to require such performance at any time thereafter; nor shall the
waiver by either party of a breach of any provision hereof be taken or held to
be a waiver of subsequent breaches of that or any other provision hereof.
14.5 Severability. In the event that any provision of this Agreement
shall be unenforceable or invalid under any applicable law or be so held by
applicable court decision, such unenforceability or invalidity shall not render
this Agreement unenforceable or invalid as a whole, and, in such event, such
provision shall be changed and interpreted so as to best accomplish the
objectives of such provisions within the limits of applicable law or applicable
court decisions.
14.6 Headings. The section headings appearing in this Agreement are
inserted only as a matter of convenience and in no way define, limit, construe
or describe the scope or extent of such section or in any way affect such
section.
14.7 No Solicitation. During the three-year period commencing on the
Effective Date, and for a period of one year thereafter, Converge and Vert each
agree not to directly or indirectly solicit, encourage or cause others to
solicit or encourage any employees or
29
individual independent contractors of the other party to terminate their
employment or independent contracting relationship with the other party and
become an employee or independent contractor of the soliciting party or its
Affiliate. This provision does not prohibit a party's responding to unsolicited
employment inquiries and/or any indirect solicitations and other employment
activities (e.g., job postings, advertising of positions) that are not
specifically targeted at any particular individual.
14.8 Choice of Law and Forum; Waiver of Jury Trial; Limitation of
Action. This Agreement and performance under this Agreement shall be governed by
the laws of the United States of America and of the State of California as
applied to agreements entered into and to be performed entirely within
California between California residents, excluding its conflicts of law
provisions. The United Nations Convention on Contracts for the International
Sale of Goods is specifically excluded from application to this Agreement. Both
parties consent to the jurisdiction of the state and federal courts located in
the County of Santa Clara, California and in the County of San Francisco,
California to hear and resolve any and all actions and proceedings arising from
or relating to this Agreement or the Software. The parties expressly waive any
right to a jury trial regarding disputes related to this Agreement. Unless
otherwise provided by local law without the possibility of contractual waiver or
limitation, any legal or other action related to this Agreement must be
commenced no later than two years from the date on which the cause of action
arose.
14.9 No Agency. Nothing contained herein shall be construed as
creating any agency, partnership or other form of joint enterprise between the
parties or to allow either party to bind the other or incur any obligation on
its behalf.
14.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument. This Agreement shall
become binding when any one or more counterparts hereof, individually or taken
together, bear the signatures of both parties hereto. For the purposes hereof, a
facsimile copy of this Agreement, including the signature pages hereto, shall be
deemed an original.
14.11 Assignment. A party may assign this Agreement to any
Affiliate. Otherwise, neither party may assign this Agreement without the other
party's prior written consent (not to be unreasonably withheld). No transfer of
this Agreement by operation of law or change in Control of a party, including,
without limitation, by merger, consolidation or sale or other transfer of equity
interests, shall be considered an assignment for purposes of this Section 14.11.
This Agreement will bind and inure to the benefit of the parties and their
respective successors and permitted assigns.
14.12 No Third-Party Beneficiaries. Except as expressly stated in
Section 8, nothing in this Agreement is intended to confer benefits, rights or
remedies unto any person or entity other than the parties and their successors
and permitted assigns.
14.13 Non-Exclusive Agreement. Except as expressly stated herein,
this Agreement is not exclusive as to either party, and, subject to the express
provisions of this
30
Agreement, each party will have the right to conduct any other business in which
it may now or hereafter be engaged.
14.14 Entire Agreement. This Agreement, together with the
Professional Services Agreement, are the entire agreement between Vert and
Converge relating to the subject matter of this Agreement. This Agreement shall
supersede any prior agreement or understanding, whether written or oral, and any
other communications between Vert and Converge relating to the subject matter of
this Agreement. This Agreement may only be amended by a writing specifically
referencing this Agreement, which has been signed by authorized representatives
of each party.
31
IN WITNESS WHEREOF, the undersigned do hereby execute this parties have
caused this Agreement to be signed by their duly authorized representatives as
of the date first written above in this Agreement.
VerticalNet, Inc. Converge, Inc.
By: By:
------------------------------------ -------------------------------
---------------------------------------- -----------------------------------
(Print Name) (Print Name)
Title: Title:
--------------------------------- ----------------------------
Tradeum, Inc., dba VerticalNet Solutions
By:
------------------------------------
----------------------------------------
(Print Name)
Title:
---------------------------------
32
Exhibit A
Current Products
Community Products:
VerticalNet Community Builder
VerticalNet Community Manager
Content Products:
VerticalNet Content Builder
VerticalNet Content Syndicator
VerticalNet Content Manager
Commerce Products:
VerticalNet Auctions
VerticalNet Exchange
VerticalNet Aggregated Catalog
VerticalNet Distributed Catalog
VerticalNet RFP/RFQ (available 1/31/01)
VerticalNet Structured Negotiations (available 1/31/01)
Tools (for internal development use only):
VerticalNet Ontology Builder
VerticalNet C2 Hub
VerticalNet Business Publisher
VerticalNet Business Publisher Agent
Platform Products:
VerticalNet Trade Server
33
Exhibit B
Payment of Certain Fees
The fees due and owing from Converge under Section 3.1 are as follows:
Contract Year 1 - $28,000,000, payable as follows: $13,000,000 on the Effective
Date, and of $15,000,000 on the first day of the third quarter in Year 1.
Contract Year 2 - $25,000,000, payable in equal semi-annual payments of
$12,500,000 on the first day of each of the first and third quarters in Year 2.
Contract Year 3 - $20,000,000, payable as follows: $12,500,000 on the first day
of the first quarter in Year 3, and $7,500,000 on the first day of the third
quarter in Year 3.
34
Exhibit C
Maintenance & Support Services
1.0 Problem Handling. VNS shall be responsible for responding to Problems as set
forth in this Exhibit C. Only authorized personnel designated by Converge will
report Problems to VNS technical support personnel ("Converge Tech Support"),
the number of such Converge personnel will not exceed 50 without VNS approval.
Unless otherwise agreed in writing in a SOW executed under the PSA, Converge and
the Converge Subsidiaries shall be responsible for providing "Level 1" (help
desk-type support) support to both Converge Personnel (internal help desk) and
Converge users (external help desk), for each of the Deployed Products on which
VNS has provided the necessary training as described herein. VNS shall be
responsible for providing "Level 2" (technical inquiries and support) and "Level
3" (code fixes) support for such Deployed Products and Xxxxx 0, 0 and 3 support
for all other Products. Converge Tech Support will be the "single point of
contact" for support of the Products and the escalation of Problems in
accordance with this Exhibit C. In the case of a Deployed Product for which
Converge is proving Level 1 support, Problems will be escalated to VNS only
after such Problems have been reasonably escalated through the "Level 1" support
procedures of Converge and the Converge Subsidiaries. With respect to Problems
reported to VNS, Converge shall provide, to the extent known to Converge,
information to enable VNS to reproduce, verify, diagnose and correct such
Problems. VNS will attempt to resolve Problems reported by Converge to VNS as
set forth below.
VNS will provide all reasonable training and available training materials to
enable Converge to provide Level 1 support for the Deployed Products ("Support
Training"). Support Training will include both introductory training reasonably
in advance of when new Deployed Products are put into production by Converge and
periodic refreshers as appropriate when Updates and Enhancements of Deployed
Products are released. Support Training will be provided at mutually agreed
locations and schedules, and each party will bear its own costs and expenses
(except for reasonable travel for VNS Personnel and out-of-pocket costs for
training materials, which Converge will reimburse to VNS at cost).
All Problems shall be reported by Converge and the Converge Subsidiaries to
designated VNS technical support personnel via telephone, e-mail and/or in some
other manner agreed to by the parties. VNS will establish a process to check
incoming electronic requests for Level 2 at least once every two hours and Level
3 support at least once every four hours. VNS will maintain procedures and
systems designed to ensure that Problems are properly logged and track and all
new Error corrections are compatible with previous Error corrections. Packaging
of Error corrections will be done as mutually agreed to by the parties. VNS will
provide to Converge the names, phone numbers and 24X7 pager numbers of the VNS
support personnel to contact outside of Business Hours when high priority
Problems are encountered that require immediate assistance.
35
2.0 Problem Severity Levels. The following chart describes the distinctions
between the different severity levels for Problems reported by Converge and the
Converge Subsidiaries.
Severity Level Definition
1 A "Severity Level 1" Problem is one where critical or central
functionality of the Product is unavailable and the Product
cannot reasonably be used and/or performance of the Product is
severely degraded. The adverse impact of a Severity 1 Problem
on Converge's business is severe and immediate, and requires
an immediate solution.
- A "Severity Level 1" Problem may have one or more of the
following characteristics:
- Data is corrupt or Product corrupts or loses data
- Complete or severe lack of ability to use the Product
- Product crashes repeatedly
- Product is not operational
- The Product fails to run to completion or returns
incorrect results
2 A "Severity Level 2" Problem is one where critical, central or
important functionality of the Product is restricted and/or
performance of the Product is significantly degraded. Use of
the Product can continue in a restricted fashion or the user
experiences a significant degradation of Product functionality
and/or performance.
o A "Severity Level 2" Problem may have one or more of the
following characteristics:
o A substantial loss of use of certain functionality of
the Product for which there is an insufficient
workaround
o Performance of the Product is severely degraded
o Some important Product functionality is unavailable or
improperly functioning, but the Product can continue to
operate in a restricted fashion
3 A "Severity Level 3" Problem causes minimal interruption to
non-central or non-important functionality. The Problem has a
minor impact or is inconvenient.
o A "Severity Level 3" Problem may have one or more of the
following characteristics:
o Performance of the Product is degraded in a non-critical
manner
o Performance of the Product is minimally impaired
4 A "Severity Level 4" Problem causes no loss of use of the
Product.
o Cosmetic Problem with the Product
o Documentation error
o Minor incorrect behavior of the Product that does not
impede its operation
3.0 Problem Response and Resolution. VNS will review all Problems reported by
Converge to determine whether they are caused by Errors. In the event of a
reasonable uncertainty, the parties will assume the higher level until they have
sufficient information to make a determination. VNS shall conduct such review
and use best efforts to provide Converge
36
with an initial response and status reports as set forth in the table below.
Should VNS determine that a Problem is caused by one or more Errors, VNS will
use best efforts to resolve such Errors as set forth in the table below. If
Converge unreasonably reports a Problem as being at a Severity Level that is
higher than what proves to be the actual Severity Level of the Problem, Converge
shall pay or reimburse VNS for all incremental costs and expenses incurred by
VNS in reviewing and responding to the Problem as a higher Severity Level
Problem. If VNS' review of, or response to, a Problem reported by Converge
establishes that the Problem was not due to an Error, Converge shall pay or
reimburse VNS for all costs and expenses reasonably incurred by VNS in reviewing
and responding to the Problem.
In addition to individual Problem reporting as described below, commencing not
later than July 1, 2001, VNS will provide to Converge a weekly status log of
Problem tickets to include: severity level of Problem as reported by Converge,
severity level of Problem as determined by VNS, date and time each Problem was
reported, date and time of initial response for each reported Problems, date and
time of status for each reported, date and time of diagnosis for each reported,
and date and time of work-around or fix. Between the Effective Date and July 1,
2001, VNS shall provide coverage with all reasonably available information of a
similar nature.
Severity Level Response Time and Status Reports Resolution Efforts
1 - 30 minutes if the Problem is reported to Continuous efforts (24x7) with best available
VNS during Business Hours - resources to provide a workaround, patch, fix or other
- 90 minutes if the Problem is reported to solution for the Error as quickly and efficiently as
VNS outside of Business Hours possible, beginning as soon as practicable after the
- Problem Diagnosis within 12 hours Error is reproduced by VNS.
- Status reports every 24 hours or upon - If a workaround, patch, fix or other solution is not
request provided within 24 hours after VNS has reproduced the
Error, providing Converge with an assessment and action
plan detailing the proposed method of resolution and a
time schedule for delivery of a correction.
- Severity Level 1 requires maximum effort support
until an emergency fix or bypass is developed and
available for shipment to Converge. Critical situations
may require customer, Converge and VNS personnel to be at
their respective work locations or available on an
around-the-clock basis.
- Providing a final fix or work-around within 24 hours
that down grades the Problem to Severity Level 3 or less
and that does not substantially impair performance or
functionality.
2 - Two hours if the Problem is reported to - Continuous efforts (24x7) to provide a workaround,
VNS during Business Hours patch, fix or other solution for the Error as quickly and
- Two hours following the resumption of efficiently as possible, beginning as soon as practicable
Business Hours if the Problem is reported after the Error is reproduced by VNS.
outside of Business Hours - If a workaround, patch, fix or other solution is not
- Problem Diagnosis within 24 hours provided within 48 hours after VNS has reproduced the
- Status reports every 24 hours or upon Error, providing Converge with an assessment and action
request plan detailing the proposed method of resolution and a
time schedule for delivery of a correction.
- Providing a final fix or work-around within 72 hours
that down grades the Problem to Severity Level 3 or less
and that does not substantially impair performance or
functionality.
37
Severity Level Response Time and Status Reports Resolution Efforts
3 - One Business Day after the Problem is - Reasonable efforts during Business Hours to provide
reported to VNS a workaround, patch, fix or other solution for the Error
- Progress and status reports as within 5 Business Days, beginning within a reasonable
appropriate but at least weekly period of time after the Error is reproduced by VNS.
4 - Five Business Days after the Error is - Reasonable efforts to resolve the Error in a future
reported to VNS Update.
- Progress and status reports as appropriate
38
Exhibit D
Promotion
1. Definitions. In addition to other terms defined elsewhere in this Exhibit D,
the following defined terms used in this Exhibit D shall have the meanings set
forth below:
1.1 "End User" shall mean a Qualified Lead that has entered into an End
User License Agreement with VNS for one or more Products.
1.2 "End User License Agreement" shall mean the agreement(s) used from
time to time by VNS to license Products to a customer for such customer's
internal business purposes and not for service bureau or time-sharing purposes.
1.3 "Net Revenue" shall mean the aggregate of the license fees received by
Vert from each End User (a) if an End User License Agreement for the Referable
Product(s) listed on the applicable Registration Form is entered into between
VNS and a Qualified Lead during the six-month period following the acceptance of
a registration or a re-registration pursuant to Section 2.2 of this Exhibit D,
the license fees received by VNS from such Qualified Lead during the term of the
applicable End User License Agreement (including any renewal terms) and (b) if
an End User License Agreement for Referable Product(s) other than those listed
on the applicable Registration Form is entered into between VNS and a Qualified
Lead during the six-month period following the acceptance of a registration or a
re-registration pursuant to Section 2.2 of this Exhibit D, the license fees
received by VNS from such Qualified Lead during the period commencing on the
date of the registration or re-registration and ending on the first anniversary
of such date, less any allowances, discounts, surcharges, cancellation charges,
taxes and collection costs paid to third parties in connection with the license
of Referable Product(s) to such Qualified Lead.
1.4 "Referable Products" means the Products listed on Schedule D-1.
1.5 "Referring Party" means Converge, Inc., a Delaware corporation, the
Permitted Subcontractors (as defined below) and any other permitted
subcontractors (subject to VNS' approval pursuant to Section 2.1 of this Exhibit
D).
1.6 "Registration Form" means a registration form in the format attached
hereto as Schedule D-2.
2. Referral of Prospective End Users by a Referring Party to VNS.
2.1 Referrals of Prospective End Users. From time to time during the
Product Term, at the discretion of Converge and/or the Referring Parties, as
applicable, Converge and/or the Referring Parties may (a) contact by telephone
or in person an individual with authority to purchase one or more Referable
Products for himself/herself or on behalf of an entity or a division or
operating unit of an entity, (b) identify that such individual, or the entity,
division or operating unit that he/she represents, has a need for such Referable
Product(s) and (c) confirm that such individual, or the entity, division or
operating unit that he/she represents, has an interest in purchasing such
Referable Product(s). Converge shall not, and shall cause the Referring
39
Parties to not, enter into agreements or arrangements with resellers or agents
to sell, market or promote the Referable Products without the prior written
consent of VNS, which consent may be withheld in VNS' sole discretion; provided,
however that VNS hereby consents to Converge entering into subcontracts to sell,
market and promote the Referable Products in accordance with this Schedule D
with mutually acceptable third parties ("Permitted Subcontractors"). The form of
each subcontract under this Schedule D shall be subject to the prior approval of
VNS, such approval not to be unreasonably withheld or delayed.
2.2 Registration of Referrals. To register an individual as a prospective
End User or authorized representative of a prospective End User with VNS,
Converge or the Referring Party must (a) submit the name of the individual and
the prospective End User and other required information to VNS using a
Registration Form and (b) receive written confirmation from VNS that VNS accepts
the registration of the individual and the prospective End User. VNS shall
accept a fully completed registration unless the applicable prospective End User
is already a customer of VNS, or the applicable individual is being actively
pursued as a previously identified lead by VNS.
2.3 Qualification of Referrals. After VNS' acceptance of a registration of
an individual and a prospective End User, VNS shall either qualify such
individual and prospective End User in VNS' reasonable business discretion (a
"Qualified Lead") or notify Converge or the Referring Party, as applicable,
that, in the exercise of its reasonable discretion, VNS has declined to qualify
such individual and prospective End User. If, within 180 days after the referral
of an individual and a prospective End User that VNS did not qualify, VNS enters
into an End User License Agreement with such prospective End User through such
individual (or any individual who was directly contacted by the referred
individual in connection with making the decision to become an End User), such
prospective End User shall be deemed to be a Qualified Lead for the purposes of
Section 1.3 of this Exhibit D and Section 2.7 of this Exhibit D.
2.4 Additional Assistance. From time to time, the parties may mutually
agree (such agreement not to be unreasonably withheld or delayed) that Converge
may provide additional assistance to VNS in connection with the execution and
delivery of an End User License Agreements by a certain Qualified Lead.
2.5 Execution and Delivery of End User License Agreement. After receipt of
the name of a Qualified Lead, VNS shall use good faith efforts to enter into the
then-current standard End User License Agreement with such Qualified Lead.
2.6 No Authority. VNS shall have sole and complete control over the
pricing, terms and conditions for the transactions related to the Referable
Products. The Referring Parties shall not represent to any prospective End User
that Converge or any other Referring Party, if any, has any power whatsoever to
bind VNS as to any arrangement with such prospective End Users.
2.7 Payment of Referral Fees by VNS. VNS shall pay commissions (the
"Commissions") to Converge, as mutually agreed upon by the parties, within 30
days after the end of each calendar quarter during the term of this Schedule D
on all Net Revenue received by VNS during such calendar quarter. All payments
will be made in U.S. dollars. All fees and
40
other payments not paid when due shall be subject to late charges of the lesser
of (a) 1.5% per month of the overdue amount or (b) the maximum permitted under
applicable law.
2.8 Commission or Referral Fee Sharing. Notwithstanding anything to the
contrary herein, if Converge works with one or more third party Referring
Parties (subject to VNS' approval as set forth in Section 2.1 of this Schedule
D) to refer End Users for which Commissions are payable hereunder, VNS shall pay
all Commissions to Converge and Converge shall divide such Commissions between
Converge and any such third party Referring Parties as agreed upon by Converge
and such Referring Parties.
2.9 Expenses. Converge shall be responsible for all costs and expenses,
including, but not limited to, travel, trade show and other sales, marketing and
promotional expenses incurred in connection with (a) the sale, marketing and
promotion of the Referable Products by Converge or a Referring Party and (b) any
other responsibilities of, and activities by, Converge or a Referring Party
under this Exhibit D.
3. Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH HEREIN, EACH PARTY
HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO
THIS EXHIBIT D, THE REFERABLE PRODUCTS AND ITS PERFORMANCE HEREUNDER, INCLUDING
BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT.
4. Limitations on Liability. EITHER PARTY'S MAXIMUM AGGREGATE LIABILITY TO THE
OTHER PARTY HERETO OR ANY THIRD PARTY FOR DAMAGES RELATED TO THIS EXHIBIT D OR
THE REFERABLE PRODUCTS OR ITS PERFORMANCE HEREUNDER, WHETHER FOR BREACH OF
CONTRACT OR WARRANTY, STRICT LIABILITY, NEGLIGENCE OR OTHERWISE, SHALL NOT
EXCEED THE COMMISSIONS PAID TO CONVERGE UNDER THIS EXHIBIT D. IN NO EVENT SHALL
EITHER PARTY BE LIABLE OR OBLIGATED IN ANY MANNER FOR ANY SPECIAL, INCIDENTAL,
EXEMPLARY OR CONSEQUENTIAL DAMAGES OF ANY KIND (INCLUDING, BUT NOT LIMITED TO,
DAMAGES OR COSTS INCURRED AS A RESULT OF LOSS OF TIME, LOSS OF DATA, LOSS OF
PROFITS OR REVENUE), REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT,
TORT, NEGLIGENCE, STRICT PRODUCT LIABILITY, OR OTHERWISE, EVEN IF VNS HAS BEEN
INFORMED OF THE POSSIBILITY OF ANY SUCH DAMAGES IN ADVANCE.
5. Term and Termination of this Schedule D.
5.1 Term. The provisions of this Exhibit D shall be effective during the
Product Term, unless terminated earlier pursuant to Section 5.2 of this Exhibit
D.
5.2 Termination. Either party may immediately terminate this Schedule D
during the Product Term (a) for cause by written notice to the other party if
the other party materially breaches any provision of this Exhibit D and such
breach is not remedied within 30 days of such party's receipt of written notice
thereof, or (b) if the other party becomes insolvent, files for
41
bankruptcy or is subjected to involuntary bankruptcy proceedings that are not
dismissed within 60 days or makes a general assignment for the benefit of its
creditors.
5.3 Effect of Termination. The license rights granted to Converge under
this Exhibit D shall automatically terminate upon the effective date of any
termination of this Exhibit D.
6. Survival. The following sections of this Schedule D shall survive the
termination of expiration of this Schedule D: Section 2.6, Section 2.7, Section
2.8, Section 2.9, Section 3, Section 4, Section 5.3 and this Section 5.4.
42
Schedule D-1
Referable Products
Community Products:
VerticalNet Community Builder
VerticalNet Community Manager
Content Products:
VerticalNet Content Builder
VerticalNet Content Syndicator
VerticalNet Content Manager
Commerce Products:
VerticalNet Auction
VerticalNet Exchange
VerticalNet Aggregated Catalog
VerticalNet Distributed Catalog
VerticalNet RFP/RFQ (available 1/31/01)
VerticalNet Structured Negotiations (available 1/31/01)
Platform:
VerticalNet Trade Server
43
Schedule D-2
Registration Form
Prospect Information
Name and Contact Information of Referred
Individual:
Estimated licensed Product Net Revenue:
Name of Applicable Company, Division or
Business Unit (End User): US$____________________________________
Referring Party Sales Executive:
Contact History
DATE FORMAT COMMENTS
Engagement Information
List Referable Products to be sold:
Brief description of Prospective End User's requirements:
Submitted By
Converge Manager: Signature and Date:
Name:
Title:
Telephone Number:
Email:
Acceptance Acknowledgement
Approving VNS Manager: Signature and Date:
44
Exhibit E
Japan-Restricted Community and Content Products
VerticalNet Content Repository Virtual Products
- Article Editor - Virtual Workplace
- Download Editor - Virtual Office
- Storefront Editor - Virtual Eckfield
- E-commerce Center Editor
- Storefront Migration Q/A
- Document Editor
- Document Bucket Editor
- Link Bucket Editor
- Query Editor
- Author Editor
- Source Editor
- Tag Creator
- Tag Editor
- External Tag Treeview
- External Editor Tools
VerticalNet Online Tools
- New Online Creation Management
- Existing Online Management Tools
VerticalNet Editor Tools
- Online Management
- Ad Manager
- Newsletter Management
- Association Creation/Management
- Buyer's Guide Database Management
- Career Center Creation/Management
- Chat Management
- RFP/RFQ management
- Admin User Management
- Events Calendar Management
- Industry Deals Interface
- Editor's Biography Management
- Discussion Forum Interface
- Survey Management
- User Registration Management
- Bookstore Market Place Management
45
Exhibit F
Converge Trademark Usage Guidelines
Converge Marks shall always be used in accordance with generally-accepted good
trademark practices.
46
Exhibit G
Vert Trademark Usage Guidelines
1. Vert Marks must always be used as proper adjectives and must be followed
by generic descriptors ending in nouns that are appropriate for the
particular Vert Xxxx.
2. Vert Marks shall never be used in the following manners: (i) as a verb,
(ii) as a possessive, (iii) as a noun or (iv) in a plural form.
3. Vert Marks shall never be combined with any other entity's Marks, trade
names or product/service names.
4. Vert Marks shall never be shortened, abbreviated, translated into another
language or made into acronyms.
5. Vert Marks shall be followed by the appropriate trademark symbol.
6. Vert Marks shall never be used as "meta-tags" or "keywords."
7. Vert Marks shall be identified as belonging to Vert Tech LLC, or used by
permission of Vert Tech LLC.
8. If you are licensed to use a Vert Xxxx consisting of a logo ("Logo"), Vert
will provide you with artwork for the Logo. You may not alter this artwork
in any way without Vert's prior written permission.
9. Each use of the Logo must include the notice: "This Logo is a registered
trademark or service xxxx of Vert Tech LLC in the United States and/or
other countries."
10. All Logos (including, but not limited to, logotypes, trade dress and other
elements of product packaging and web sites) may not be imitated in any of
your materials without Vert's prior written permission.
11. All Logos may not appear larger and/or more prominent than your own
company name, service name, product name, or trademark on any materials.
12. You may not combine the Logo with any other object, including, but not
limited to, other logos, words, icons, graphics, photos, slogans, numbers
or other design elements.
13. The Logo may not be used as a design feature on any of your materials.
14. Minimum size for the Logo is 1/2" wide.
15. The Logo must stand alone. A minimum amount of empty space must surround
the Logo separating it from any other object, such as type, photography,
borders, edges, and so on. The required area of empty space around the
Logo must be 1/2x, where x equals the height of the Logo.
16. The color version is the preferred way of reproducing the Logo. The Logo
consists of a three-dimensional orange, yellow, xxxxx and red-orange upper
case "V" suspended above a light blue oblong disk. The color version can
be reproduced only as described here. The designated colors are as
follows:
Color Pantone Four-color process RGB (8-bit) Hex#
Orange PMS 157 / M51% Y85% / 000-000-00 / FF6633
Yellow PMS 141 / C04% M30% Y86% / 000-000-00 / FFCC33
Xxxxx PMS 1815 / C30% M97% Y100% K26% / 131-8-1 / 990000
Red-Orange PMS 180 / C02% M91% Y95% / 253-26-9 / FF0000
Light Blue PMS 3125 / C77% Y33% / 00-000-000 / 00CCCC
47
Exhibit H
Terms of Use
LIMITED LICENSE
The Converge Marketplace contains technology, information and other materials,
such as text, graphics, logos, button icons, images, audio clips, features and
functionality that we have licensed from third parties (collectively
"Third-Party Content"). You may use, access and display the Third-Party Content
solely in connection with your use of the Converge Marketplace and any services
we provide through the Converge Marketplace, and only for so long as you comply
with these terms and conditions of use. Any other use, reproduction,
modification, distribution or republication of the Third-Party Content without
the prior written consent of our third-party licensors is strictly prohibited.
COPYRIGHT AND PROPRIETARY RIGHTS
The Third-Party Content is the property of our third-party licensors or their
licensors and is protected by United States and international copyright law,
trademark law and/or patent law, as well as other state, federal and
international laws and regulations. Except as expressly stated above, neither we
nor our third-party licensors grant any rights to you under any copyrights,
trademarks, patents or other laws and regulations respecting the Third-Party
Content.
DISCLAIMERS
NEITHER WE NOR OUR THIRD-PARTY LICENSORS REPRESENT OR WARRANT THAT THE
THIRD-PARTY CONTENT IS ERROR-FREE, OR THAT ANY ERRORS IN THE THIRD-PARTY CONTENT
CAN OR WILL BE CORRECTED. NOR DO WE OR OUR THIRD PARTY LICENSORS MAKE ANY
REPRESENTATIONS OR WARRANTIES ABOUT THE ACCURACY, RELIABILITY, CURRENCY,
QUALITY, PERFORMANCE OR SUITABILITY OF ANY THIRD-PARTY CONTENT. TO THE FULLEST
EXTENT PERMISSIBLE BY LAW, WE AND OUR LICENSORS DISCLAIM ALL WARRANTIES OF ANY
KIND RESPECTING THE THIRD-PARTY CONTENT, EITHER EXPRESS OR IMPLIED, INCLUDING,
BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT,
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
LIMITATIONS OF LIABILITY
IN THE EVENT OF ANY PROBLEM WITH THE THIRD-PARTY CONTENT, YOU AGREE THAT YOUR
SOLE REMEDY IS TO CEASE USING SUCH CONTENT. UNDER NO CIRCUMSTANCES SHALL WE OR
OUR THIRD-PARTY LICENSORS, OR ANY OF OUR OR THEIR RESPECTIVE OFFICERS,
DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS OR REPRESENTATIVES, BE LIABLE FOR ANY
DAMAGES WHATSOEVER, INCLUDING, BUT NOT LIMITED TO, DIRECT, INDIRECT, SPECIAL,
CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES, ARISING FROM OR IN CONNECTION WITH
THE THIRD-PARTY CONTENT OR YOUR USE OF SUCH CONTENT, WHETHER UNDER A THEORY OF
BREACH OF CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, EVEN WE OR OUR
THIRD-PARTY LICENSORS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH
48
DAMAGES. THESE LIMITATIONS OF LIABILITY SHALL NOT APPLY TO THE EXTENT PROHIBITED
BY LAW.
INDEMNIFICATION
You agree to defend, indemnify and hold harmless us and our third-party
licensors, and our and their respective officers, directors, shareholders,
employees, agents and representatives, from and against any and all claims,
actions, demands, liabilities, losses or damages (including reasonable legal and
accounting fees) arising out of or related to your use of the Third-Party
Content or any violation of these terms and conditions of use.
THIRD-PARTY BENEFICIARY
Our licensors of the Third-Party Content shall be third-party beneficiaries of
these terms and conditions of use, and shall be entitled to separately enforce
such terms and conditions of use against you.
49
Exhibit I
Marketplace Protection Measures and Procedures
Converge Web Sites - Marketplace Protection Measures
- Deployment of a data-reliability architecture relying on multiple
data centers in geographically disparate locations for all core
functions of the Converge Web Site
- Industry-Standard efforts to restrict access to data centers.
- Industry-Standard hardware and software designed to provide
transparent failover from one data center to another.
- Industry-Standard measures to protect the data centers from damage
due to fire, water, storms, flood, vandalism, and other similar
events.
- Industry Standard use of uninterruptible power supplies for all
appropriate data center components.
- Deployment of reliable storage media, such as RAID 5 disks.
- Active monitoring of failures so as to allow restart of failed
systems and replacement of systems in the event of failure, without
loss of significant data.
- Industry Standard techniques for monitoring of disk and memory
usage, including "water-level"-based alarm approaches designed to
identify storage media approaching their capacities.
Converge Web Sites - Marketplace Response Procedures
- Immediately dedicating a team of not less than five Converge
Personnel with in-depth knowledge of the hardware and software
affected by the applicable Cataclysmic Event to work on a 24X7 basis
with Vert Personnel to characterize, diagnose, and resolve any
third-party software errors that may be contributing to the
Cataclysmic Event.
- Providing Vert with a description of the Problem and the conditions
that caused it, to the extent know by Converge Personnel.
- Supporting Vert's efforts to classify, replicate, diagnose, and
correct any Errors that could have caused the Cataclysmic Event.
- Providing Vert with access to Converge's computing environment, both
electronically and physically.
- Providing Vert with access to Converge Personnel and users of the
Converge Web Site who may have knowledge of the possible causes of
the Error that could have caused the Cataclysmic Event.
- Ensuring the availability on an as-needed basis of Converge
Personnel from such other providers of software and hardware to
Converge as may be necessary to effectuate a Cataclysmic Event Cure.
- Providing Vert with access to all documentation, data backups, code
libraries, third-party software documentation, third-party software
customer support services, and other information and materials as
may be necessary to effectuate a Cataclysmic Event Cure.
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