Exhibit 10.3
Software Development License between the Company and
Sideware International SRL effective August 27, 1999
SOFTWARE DEVELOPMENT LICENSE
DATED for reference the 27th day of August, 1999.
BETWEEN:
SIDEWARE SYSTEMS INC., a company with an office at #102 -
000 Xxxx 0xx Xxxxxx, Xxxxx Xxxxxxxxx, X.X., Xxxxxx X0X 0X0
OF THE FIRST PART;
(herein called "Sideware")
AND:
SIDEWARE INTERNATIONAL SRL, with its head office and place
of business at 0xx Xxxxxx, Xxxxxxxx, Xx. Xxxxx, Barbados,
West Indies
OF THE SECOND PART;
(herein called "Developer")
RECITALS
A. Sideware has developed and is the owner of the Xx. Xxxx Version 2.0
Software described in Schedule "A".
B. Sideware has agreed to grant the Developer, subject to the terms of this
agreement, a license to use such Software to develop Derivative Products
and to market, distribute and sell such Derivative Products.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein the parties record their agreement as follows:
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1.0 DEFINITIONS
1.1 DEFINED TERMS - In this agreement:
(a) "Authorized Employee" means an employee or a contractor of Developer
who requires access to the Software and Source Code solely for the
purpose of developing the Derivative Products;
(b) "Derivative Products" means the products developed by the Developer
using the Software in which all or part of the Software may be
incorporated;
(c) "Developer" means Sideware International SRL;
(d) "End User" means a third party who purchases a copy of the Derivative
Products from the Developer or the Developer's distributor for its own
internal use pursuant to the Sub-license Agreement referred to in
section 3;
(e) "Default" has the meaning provided in section 8;
(f) "Sideware" means Sideware Systems Inc.
(g) "Software" means the machine readable object code for the computer
programs listed in Schedule "A";
(h) "Source Code" means the human readable or source code version of the
Software developed by Sideware.
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1.2 CONSTRUCTION - In this agreement, except as otherwise expressly provided:
(a) the headings and captions will be considered as provided for
convenience only and not as forming a part of this agreement and will
not be used to interpret, define, or limit the scope, extent or intent
of this agreement or any of its provisions;
(b) all dollar amounts and payments referred to in this agreement are in
United States of America currency unless specifically indicated
otherwise;
(c) a reference to "approval", "authorization", "consent", "designation"
or "notice" means written approval, written authorization, written
consent, written designation or written notice unless specifically
indicated otherwise; and
(d) a reference in this agreement to a particular section is a reference
to such numbered section of this agreement.
2.0 GRANT OF LICENSE
2.1 GRANT OF LICENSE - Subject to the terms and conditions of this agreement,
Sideware grants to Developer a non-exclusive fully-paid license to use the
Software for the purpose of developing Derivative Products and marketing,
distributing and selling the Derivative Products to End Users located
anywhere in the world outside of Canada.
2.2 DELIVERY OF SOFTWARE AND UTILIZATION - Upon signing of this agreement
Sideware will deliver to Developer the Software and the Source Code.
Except as expressly permitted by this agreement, at no time, whether during
or after the term of this agreement, shall Developer utilize the Software
and Source Code except in accordance with section 2.1. Without limiting
the foregoing, Developer shall refrain from taking any action such as
reverse assembly or reverse compilation, to derive a source code equivalent
of the Software programs.
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2.3 USE OF SOFTWARE MATERIALS - Developer may copy the Software and the Source
Code materials that are provided by Sideware pursuant to section 2.2 solely
for the following purposes:
(a) to understand the contents of the Software materials;
(b) for backup purposes; and
(c) for archive purposes.
In making any copies of the Software, Developer shall preserve and
reproduce all copyright, trademark or proprietary legends on any copy or
copies of any Software materials or any portion thereof.
2.4 NON-DISCLOSURE - Developer shall not make available, provide or otherwise
allow or permit the provision, directly or indirectly, of the Source Code
for the Software or any copy thereof, in any form, representation or
medium, including but not limited to, electronic or optical storage
thereof, to any third party.
2.5 AUTHORIZED EMPLOYEES - Prior to any Authorized Employee of Developer having
access to the Software and Source Code provided by Sideware, Developer
shall inform such Authorized Employee of its obligations under this
agreement with respect to the Source Code and Software, place the name of
such Authorized Employee on the Authorized Employee list and provide such
list of Authorized Employees to Sideware. The procedures in this section
shall be undertaken for every Authorized Employee, prior to such newly
Authorized Employee having access to the Software.
2.6 Developer agrees that only those Authorized Employees who have signed an
agreement agreeing to transfer and confer onto the Developer all
proprietary information and copyrights they may generate in performance of
their duties and agreeing to maintain the
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Source Code confidential shall have access to the Software and Source
Code. Developer shall provide copies of such agreements to Sideware.
3.0 DERIVATIVE PRODUCTS
3.1 RIGHT TO SUB-LICENSE - Subject to the terms and conditions of this
agreement, Developer or its distributors may sell copies of the Derivative
Products to End Users only if the End Users enter into a non-exclusive,
non-transferable sub-license agreement to use the Derivative Products.
Developer agrees to use the sub-license agreement provided by Sideware from
time to time, including any amendments or modifications thereof (the
"Sub-license Agreement").
3.2 APPOINTMENT OF DISTRIBUTORS - Subject to the terms and conditions of this
agreement, Developer may enter into reseller agreements with resellers of
software for the purpose of distributing, marketing and selling the
Derivative Products, provided such resellers agree to perform Developer's
obligations in this agreement that relate to the distribution, marketing,
sale, installation, integration and support of the Derivative Products.
Developer agrees to use the reseller agreement provided by Sideware from
time to time, including any amendments or modifications thereof (the
"Reseller Agreement").
3.3 RIGHT TO COPY - Except as otherwise provided in this agreement, Developer
is authorized to copy all or portions of the Software for distribution to
End Users within the Derivative Products and to copy, modify and/or
incorporate into the documentation for the Derivative Products, portions of
the printed documentation provided by Sideware in connection with the
Software. Developer shall preserve and reproduce Sideware's copyright,
trademark and proprietary rights notices on any such permitted copies.
3.4 DEMONSTRATION COPIES - Developer and the Developer's resellers may use
copies of Derivative Products for demonstration purposes for which no
royalty fees shall be due to Sideware.
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3.5 DISTRIBUTION AND SALES - Developer will use its best efforts to distribute
and sell the Derivative Products. From time to time as requested by
Sideware, Developer will meet with Sideware for review and consultation
regarding Developer's marketing plans and activities. For the purposes of
such review, Developer will make available to Sideware such information
concerning Developer's marketing plans and activities as Sideware may
reasonably request.
3.6 MARKETING STANDARDS - Developer agrees to conduct its marketing and sales
of Derivative Products in a manner that reflects favourably on the
Derivative Products and on the reputation and good will of Sideware and its
affiliates.
4.0 ROYALTY FEE
4.1 ROYALTY FEE - For each copy of a Derivative Product sold by Developer
pursuant to a Sub-license Agreement or Reseller Agreement, Developer shall
pay Sideware the royalty fee set forth in Schedule "B" hereto according to
the payment terms therein. Developer shall maintain an accurate list of
End Users, which shall consist of, for each End User an identification
number assigned by Developer, the Derivative Products licensed, and the
location of their use. Under no circumstances shall Sideware have access
to Developer's End User list. Developer shall also maintain records of
Derivative Product inventory held by resellers. Within thirty (30) days of
the end of each calendar quarter, Developer shall complete and submit to
Sideware the report detailing the number of copies of Derivative Products
distributed directly to End Users and the number distributed to resellers
during the previous calendar quarter, amount billed customers less
discounts, returns, and reportable sales (in the form attached hereto as
Schedule "C") and remit to Sideware all royalty fees due.
4.2 AUDIT RIGHTS - Sideware shall have the right to direct an independent audit
firm of international standing to conduct, during normal business hours, an
audit of the appropriate records of Developer with respect to the sale and
distribution of the Derivative Products and verify statements made by
Developer to Sideware with respect to
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royalty fees due. Such audit shall be at Sideware's expense unless the
adjustment to royalty fees due is greater than 5% of fees due for the
period audited, in which case Developer shall pay for all expenses
associated with the audit and all adjustments and royalty fees due.
5.0 INSTALLATION AND INTEGRATION
5.1 Developer shall be responsible for providing installation and integration
of all Derivative Products the Developer sells directly to End Users. The
Developer shall require that its distributors provide installation and
integration services for the Derivative Products they sell to End Users.
6.0 SUPPORT AND MAINTENANCE
6.1 SUPPORT - Developer will either directly, or indirectly through its
distributors, provide telephone and internet support systems to fulfill the
maintenance obligations under the Sub-license Agreement.
7.0 COPYING AND TITLE
7.1 PRINTED MATERIALS - Developer may copy in whole or in part any Software
documentation, training materials, or user guides which are provided by
Sideware in printed form. Such copies shall be governed by the terms and
conditions of this agreement.
7.2 SOFTWARE COPIES - Sideware retains ownership of the original and any copies
of the Software, in whole or in part and however modified, which are made
by Developer, except that Developer shall have and hold ownership of that
part of the Derivative Products developed by the Developer and Sideware has
and shall have no rights in that part of the Derivative Products. Except
as expressly stated in this agreement, Developer shall make no copies of
any other materials supplied to Developer pursuant to this agreement.
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8.0 TERM AND TERMINATION
8.1 TERM - The term of this agreement and the license of the Software granted
by Sideware hereunder shall commence on the date first set forth above and
shall continue for a period of five (5) years unless terminated as provided
in this section 8 or elsewhere in this agreement.
8.2 TERMINATION BY DEVELOPER - Developer may terminate this agreement and the
license granted herein on sixty (60) days notice to Sideware.
8.3 SURVIVAL - The following sections herein shall survive any termination of
the agreement, sections 2.4, 4.0, 9.1, 9.2, 9.4, 11.0, 12.0, and 13.0.
8.4 TERMINATION UPON DEFAULT - Either party may at its option terminate this
agreement upon the default by the other party in observance or compliance
with any provision of this agreement (a "Default") and if such Default has
not been corrected within the cure period set forth in section 8.8 below,
except for any Default by Developer in regards to obligations in relation
to the Source Code, in which case this agreement shall at Sideware's option
terminate immediately.
8.5 BANKRUPTCY OR INSOLVENCY - In addition to the provisions of section 8.4, it
shall constitute a Default if Developer or Sideware ceases to do business,
becomes or is declared insolvent or bankrupt, is the subject of any
proceedings related to its liquidation or insolvency which is not dismissed
within thirty (30) days or makes an assignment for the benefit of its
creditors.
8.6 LICENSE TERMINATE - Upon termination of this agreement the license granted
by Sideware to Developer hereunder shall terminate, and Developer
immediately shall discontinue using the Software. Upon termination each
party shall return and make no further use of property, materials and other
items (and all copies thereof) belonging to the other party.
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8.7 CONVERSION OF SUB-LICENSES - Upon termination of this agreement all
Sub-license Agreements of the Derivative Products granted by Developer or
its distributors shall convert automatically into licenses running directly
from Sideware or Sideware's affiliates, and Sideware or its affiliates
shall provide support to End Users provided, however, that Sideware shall
not be required to perform any of Developer's other obligations under any
Sub-license Agreement as a result of such conversion.
8.8 OPPORTUNITY TO CURE - Upon the occurrence of any Default (except a Default
regarding the Source Code), the non-defaulting party may terminate its
further obligations under the agreement only by giving written notice of
termination specifying the specific nature of the Default. Such party
shall continue to perform its obligations pursuant to this agreement for a
period of sixty (60) days following delivery of such notice to the other
party to enable that party to cure the Default. Failure to cure the
Default within such sixty (60) day period shall result in termination
without further notice by the non-defaulting party unless such party
extends the cure period by written notice.
9.0 INTELLECTUAL PROPERTY RIGHTS
9.1 OWNERSHIP SOFTWARE - Developer acknowledges that all title and intellectual
property rights, copyright, moral rights, and patent rights in and to the
Software (including but not limited to any images, photographs, animation,
video, audio, music, text and "applets" incorporated into the Software) are
owned by Sideware or licensed to Sideware by third parties. Nothing in
this agreement shall constitute a grant, transfer, or assignment to the
Developer of any of the foregoing rights.
9.2 Developer warrants that neither it nor any of its employees will knowingly
convert to their own use or to the use of any other party any industrial
secrets or trade secrets owned by Sideware or any third party in relation
to the Software.
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9.3 Developer shall not disclose, and shall keep confidential, all information
provided by Sideware or relating to the Software and marked confidential or
proprietary. This provision shall not apply to information which (i) is or
becomes part of the public domain through no act or omission of Developer,
(ii) Developer receives from a third party acting without any obligation or
restriction of confidentiality in favour of Sideware, (iii) Sideware
releases from confidential treatment by written consent, or (iv) Developer
is required by any applicable law or court order to disclose.
9.4 Developer acknowledges that Sideware would be irreparably harmed if the
Developer breaches its obligations under sections 9.1, 9.2, and 9.3, and
would be entitled to injunctive and other equitable relief if such a breach
were to occur. Developer will use its best efforts not to effect or permit
the removal or alteration of any trade names or marks, warning labels,
serial numbers or other similar markings affixed to the Software.
10.0 INFRINGEMENT INDEMNIFICATION
10.1 Sideware will indemnify, defend and hold Developer harmless from any and
all damages, liabilities, costs and expenses, including reasonable
attorney's fees, (excluding any consequential incidental and punitive
damages) arising from any judgment made against Developer, to the extent
that such judgment is based on a finding that the Software furnished by
Sideware under this agreement infringes any patent, copyright, or trade
secret. Sideware shall defend any such suit alleging such infringement
which is brought against Developer or any of its customers, and shall pay
all reasonable legal costs incurred and satisfy all judgments and decrees
against Developer, provided Developer notifies Sideware within ten (10)
business days of the date any such claim becomes known to Developer and
Developer provides such assistance and co-operation to Sideware as is
reasonably requested at Sideware's expense.
10.2 In the event Developer is enjoined from use of the Software furnished by
Sideware under this agreement due to a proceeding based upon infringement
of any patent, copyright, or trade secret, Sideware shall either (i)
promptly render the Software non-infringing and
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capable of providing services as intended, or (ii) procure for Developer
the right to continue using the Software.
10.3 Notwithstanding any other term of this agreement, Sideware shall have no
liability to Developer with respect to any claim of infringement which is
based on the combination or utilization of Software with equipment, data,
or computer programs not supplied by Sideware or the use of Software in a
manner for which such Software were not designed, or arising from any
alteration or modification of Software.
10.4 The provisions of sections 10.1 to 10.2 constitute the entire liability of
Sideware with respect to infringement of patents, copyrights and trade
secrets by Software furnished by Sideware pursuant to this agreement. For
greater certainty, Sideware shall not be liable to Developer for
consequential, incidental and punitive damages, loss or profits or damage
to business or business relations resulting from the Software infringing
any patents, copyrights and trade secrets.
11.0 WARRANTY
11.1 Sideware warrants that the Software will perform free of material
reproducible defects or errors for a period of ninety (90) days from the
date of first installation of the Server Component of the Software.
Sideware makes no separate warranty to Developer with respect to the
Software. Developer acknowledges that End Users and resellers who purchase
Derivative Products from Developer will not be entitled to the warranty
protection from Sideware. Developer agrees to provide to End Users
warranties with respect to the Derivative Products on terms substantially
the same as the warranties in the Sub-license Agreement.
11.2 THE WARRANTIES AND COVENANTS SET FORTH ABOVE ARE COMPLETE AND ARE IN LIEU
OF ALL OTHER WARRANTIES, CONDITIONS OR REPRESENTATIONS, EXPRESS OR IMPLIED
BY STATUTE, USAGE, CUSTOM OF THE TRADE OR OTHERWISE. NOTWITHSTANDING ANY
OTHER OR
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PRIOR STATEMENT, WRITTEN OR ORAL, SIDEWARE MAKES NO OTHER WARRANTIES
REGARDING THE SOFTWARE. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, SIDEWARE EXPRESSLY DISCLAIMS WARRANTIES OR REPRESENTATIONS OF
WORKMANSHIP, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, LACK OF
NEGLIGENCE, DURABILITY, ACCURACY OR COMPLETENESS OF RESPONSES, LACK OF
VIRUSES, THAT SOFTWARE WILL MEET ANY OF A CUSTOMER'S NEEDS, OR THAT
SOFTWARE WILL OPERATE ERROR FREE.
12.0 DAMAGES AND LIABILITY
12.1 TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES AGREE THAT
IN NO EVENT SHALL SIDEWARE BE LIABLE FOR ANY SPECIAL, INCIDENTAL, INDIRECT,
OR CONSEQUENTIAL DAMAGES WHATSOEVER (INCLUDING, BUT NOT LIMITED TO, DAMAGES
FOR LOSS OF PROFITS OR CONFIDENTIAL OR OTHER INFORMATION, FOR BUSINESS
INTERRUPTION, FOR PERSONAL INJURY, FOR LOSS OF PRIVACY, FOR FAILURE TO MEET
ANY DUTY INCLUDING OF GOOD FAITH OR OF REASONABLE CARE, FOR NEGLIGENCE, AND
FOR ANY OTHER PECUNIARY OR OTHER LOSS WHATSOEVER) ARISING OUT OF OR IN ANY
WAY RELATED TO THE USE OF OR INABILITY TO USE SOFTWARE PROVIDED PURSUANT TO
THIS AGREEMENT, EVEN IN THE EVENT OF THE FAULT, TORT (INCLUDING
NEGLIGENCE), STRICT LIABILITY, BREACH OF CONTRACT, OR BREACH OF WARRANTY OF
SIDEWARE, AND EVEN IF SIDEWARE HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. IN NO EVENT WILL SIDEWARE'S TOTAL LIABILITY, IN DAMAGES OR
OTHERWISE, EXCEED THE AMOUNTS ACTUALLY RECEIVED BY SIDEWARE FOR FURNISHING
THE SOFTWARE. NO ACTION REGARDLESS OF FORM, ARISING OUT OF OR IN ANY WAY
CONNECTED WITH SOFTWARE FURNISHED BY SIDEWARE MAY BE BROUGHT BY DEVELOPER
MORE THAN
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2 YEARS AFTER THE CAUSE OF ACTION HAS ACCRUED OR SUCH SHORTER
STATUTORY PERIOD AS MAY BE APPLICABLE.
13.0 USE OF SIDEWARE NAME
13.1 During the terms of this agreement, Developer is authorized to use the
product names, trade marks, logos and designations used by Sideware for
Software in connection with Developer's distribution of Derivative Products
in accordance with Sideware policies. Any such use of the trade marks,
logos, and designations is subject to the review and approval of Sideware.
Upon expiration or termination of this agreement, Developer will cease all
display, advertising and use of all Sideware names, trademarks, logos and
designations. Developer will not alter, erase or overprint any notice
provided by Sideware and will not affix any Sideware names, trade xxxx,
logo or designation to any non-Sideware software.
14.0 FORCE MAJEURE
14.1 Neither Sideware nor Developer shall be deemed to be in default of any
provision of this agreement for any failure in performance resulting from
acts or events beyond its reasonable control, including acts of nature,
acts of civil or military authority, civil disturbance, strikes, fires, or
other catastrophes.
15.0 GENERAL
15.1 This agreement shall be governed by the laws of British Columbia, Canada.
15.2 Any consent by a party to, or waiver of, a breach of this agreement by the
other party, whether express or implied, shall not constitute a consent to,
or waiver of, any different or subsequent breach.
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15.3 This agreement is personal to Developer. Neither this agreement nor any
rights hereunder may be assigned or transferred by Developer without
Sideware's prior written consent.
15.4 This agreement together with the schedules hereto is the exclusive
statement of the entire agreement between Sideware and Developer, and
supersedes all prior oral or written representations or agreements between
the parties, as to the subject matter hereof. Any modification of this
agreement must be in writing and signed by both parties. No course of
dealing between the parties or usage of trade shall be deemed to effect any
such amendment or modification.
15.5 If any provision of this agreement is held invalid, illegal, or
unenforceable by a court of competent jurisdiction, the validity, legality
and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby, and shall remain in full force and effect.
15.6 All notices, requests, demands and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered by hand
or telecopied to the addresses or fax numbers (as the case may be) stated
on the first page of this agreement, or to such other addresses or fax
numbers as may be given in writing by the parties in accordance with this
section. Any such notice, request, demand or other communication shall be
deemed to have been received, if delivered by hand, on the date of
delivery, and if telecopied, on the business day next following the date of
transmission.
IN WITNESS WHEREOF, the parties hereto have executed this agreement on the
dates set out below:
SIDEWARE SYSTEMS INC. SIDEWARE INTERNATIONAL SRL
"signed" "signed"
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Signature Signature
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---------------------------- --------------------------------
Name Name
---------------------------- --------------------------------
Date Date
LIST OF SCHEDULES
to Software Development License
dated August 27, 1999
between
SIDEWARE SYSTEMS INC.
and
SIDEWARE INTERNATIONAL SRL
Schedule "A" Description of Software
Schedule "B" Royalty and Payment Terms
Schedule "C" Quarterly Royalty Report
SCHEDULE "A"
DESCRIPTION OF THE SOFTWARE
The Xx. Xxxx Software Version 2.0 consists of: (a) instructions or statements
in machine-readable object code, including the Server Component, the CSR
Interface Component, the Server Administration Component, and the CSR
Administration Component; (b) all user manuals, handbooks, and other written
materials relating to (a) above.
SCHEDULE "B"
ROYALTY AND PAYMENT TERMS
1. ROYALTY RATE
The parties contemplate that the first Derivative Product will be Xx. Xxxx
Version 3.0. The Royalty fee for all sales of Xx. Xxxx Version 3.0 by
Developer is TEN PERCENT (10%) (the "Royalty Rate") of the Net Gross
Revenues earned by Developer.
2. PAYMENT TERMS
2.1 The Royalty fee payable to Sideware shall be calculated on a quarterly
calendar basis (the "Royalty Period") and shall be paid no later than
thirty (30) days after the end of each Royalty Period.
2.2 Net Gross Revenues for each Derivative Product means the Developer's
gross sales (the gross invoice amount billed by the Developer) in
respect of the Derivative Product less taxes, shipping charges,
quantity trade discounts shown on the invoice and further, less any
actual returns.
2.3 The obligation to pay the Royalty fee shall accrue upon the sale of
each copy of the Derivative Product by Developer directly to End Users
and to Developer's resellers regardless of the time of collection by
the Developer.
2.4 The Developer's obligations for the payment of the Royalty fee shall
survive the expiration or termination of this agreement and will
continue for so long as the Developer continues to sell copies of the
Derivative Products.
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3. ROYALTY ADJUSTMENT
3.1 The parties have agreed to establish the Royalty Rate for the
Derivative Products at what they believe would be agreed between
unrelated parties dealing at arm's length in the same circumstances.
3.2 If the Minister of National Revenue or his authorized representatives
or any similar authority should assess or reassess either or both of
the parties on the basis that a Royalty Rate should be different than
that established by the parties, then the Royalty Rate shall be deemed
to be determined as follows:
(a) such amount as may be agreed upon by the parties and all of the
relevant government tax authorities; or
(b) in the absence of any agreement pursuant to paragraph (a) above,
such amount as may be determined by a court having jurisdiction
in the matter (after all appeal rights have been exhausted or all
times for appeal have expired without appeals having been filed)
to be the Royalty Rate.
3.3 If at any time after the commencement of this agreement, either of the
parties undertakes a transfer pricing study with respect to the
Royalty for a Derivative Product and the results of the study indicate
that the Royalty should be adjusted to comply with the arm's length
requirement for "transactions" between related parties (the "Proposed
Adjustments"), the other party may agree to make the Proposed
Adjustments or reject the Proposed Adjustments stating its reasons for
rejecting the Proposed Adjustments. After considering the other
party's reasons for rejecting the Proposed Adjustments, if any, the
first party may propose Amended Proposed Adjustments or obtain the
opinion of an independent third
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party expert on the matter. The other party shall:
(a) accept the Amended Proposed Adjustments; or
(b) reach some other agreement on the adjustments to the Royalty
within forty-five (45) days of receiving the Amended Proposed
Adjustments; or
(c) accept the opinion of the third party independent expert.
3.4 Either party may request on reasonable notice a review and
re-negotiation of the Royalty Rate for a Derivative Product. Upon
such a request being made, the parties agree to conduct such a review
and re-negotiation.
3.5 Where the Royalty Rate is adjusted pursuant to sections 3.2, 3.3 or
3.4, the parties will make whatever payments or refunds are required
to fully implement the terms of the adjustment from the date it is
effective.
3.6 Each of the parties shall bear their own costs with respect to any
actions taken by a party under this section 3.
SCHEDULE "C"
QUARTERLY ROYALTY REPORT
For the quarter commencing ____________________, _______,
and ending _____________________
1. Derivative Product licensed, sold and distributed
2. Net Gross Revenue
3. Royalty Fee
