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FORECROSS
EXCLUSIVE DISTRIBUTOR AGREEMENT
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
THIS EXCLUSIVE DISTRIBUTOR AGREEMENT (this "Agreement") by and between Forecross
Corporation (hereinafter "Licensor"), a California corporation having its
principal offices at 00 Xxx Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000; and Y2K
Solutions, L.P., a Texas Limited Partnership having its principal offices at
4133 Stanford, Dallas, Texas 75225 is made and entered into as of and dated this
25th day of March, 1997 ("Commencement Date"),:
WHEREAS, Licensor is the owner of certain computer programs and methodology
together with all upgrades, improvements and enhancements defined herein as the
"Products" and "Services", which Products and Services are used to assist
customers in making their computer applications capable of correctly processing
dates in the year 2000 and beyond ("Year 2000") ;
WHEREAS, Distributor has special knowledge concerning the general business needs
of prospects in the "Territory" defined herein and familiarity with a number of
such prospects;
WHEREAS, Licensor wishes to appoint Distributor as its exclusive marketing
representative for the solicitation of customer contracts relating to the
Products and Services, and authorize Distributor to provide certain services
relating to such marketing efforts; and
WHEREAS, Distributor is willing to accept such appointment and to undertake to
provide such services under the terms of this Agreement;
NOW, THEREFORE, the parties agree as follows:
1. SCOPE
The Products and Services covered by this Agreement are Licensor's Complete/2000
automated conversion software products, related services and methodologies and
consist of computer programs, any updates thereto and conversion services
offered generally to customers by Licensor under the terms and conditions of its
then current customer contracts. Licensor offers enhancement and
error-correction services with respect to the Products under the terms and
conditions of service agreements created for each customer.
2. APPOINTMENT OF DISTRIBUTOR
Subject to the terms and conditions hereof, Licensor hereby designates and
appoints Distributor as its exclusive marketing agent and representative for the
solicitation of customer contracts related to the Products and Services from,
and the delivery of such Services to customers in the Territory. Distributor
hereby accepts such designation and appointment.
3. DUTIES OF DISTRIBUTOR
3.1 Distributor agrees, for the term of this Agreement, that it shall
promote and market the Products and Services to prospective customers
by:
1. Identifying prospects within the Territory that may benefit from
use of the Products and Services
2. Contacting prospects and conducting sales presentations of the
Products and Services
3. Performing systems analysis of the customers' applications and
providing to Licensor information to assist Licensor in preparing
proposals to prospects
4. Assisting Licensor in preparing and obtaining the prospects'
execution of customer contracts
5. Forwarding executed customer contracts to Licensor
6. Serving as a point of contact for necessary communications
between customers and Licensor with respect to the Products and
Services
7. Providing on-site Services and support, including project
management, working with customer to create date selection and
expansion rules, installing and turning over to customer the data
expansion programs and converted application programs
8. Performing all obligations of Distributor under accepted customer
contracts
9. Providing account management
3.2 Distributor shall use its best efforts to generate Year 2000 business
acceptable to Licensor. Distributor shall diligently and continuously
sell, distribute and promote the Products and Services and shall make
and maintain adequate arrangements for the distribution of Products
and Services. Distributor shall report to Licensor about Distributor's
marketing activities and shall provide forecasts to Licensor as may be
reasonably requested.
3.3 Distributor shall not during the term of this Agreement represent or
offer to represent or market, sell or distribute, in the Territory,
computer software products or services that compete directly with the
Products or Services.
3.4 In consideration for the grant of exclusivity within the Territory
defined herein, Distributor shall pay a fee to Licensor of [***].
4. CUSTOMER CONTRACTS
4.1 Distributor shall have the authority to solicit the signature of
customers on Licensor's customer contracts which have been jointly
prepared by Licensor and Distributor for customers. Distributor has
and shall exercise no authority to make any alterations in such
agreements or to execute or accept such agreements on behalf of
Licensor. Distributor shall inform all customers that such agreements
must be forwarded to Licensor for acceptance and execution by Licensor
in order for such agreement to be binding on Licensor.
4.2 Distributor has and may exercise no authority to make statements or
representations concerning the Products or Services that exceed or are
inconsistent with the marketing materials and technical specifications
provided to Distributor by Licensor. Distributor has and may exercise
no authority to bind Licensor to any undertaking or performance with
respect to the Products or Services. Licensor has and may exercise no
authority to make statements or representations concerning the
Distributor which exceed or are inconsistent with this Agreement.
Licensor has and may exercise no authority to bind Distributor to any
undertaking or performance with respect to the Products or Services,
other than as mutually agreed by Licensor and Distributor in writing
in Licensor's contract for an customer. Notwithstanding the foregoing,
in the event that a prospective customer contacts Licensor to request
Products or Services and Distributor elects not to pursue the
prospective customer, Licensor shall be free to negotiate
independently with the customer for the provision of Products or
Services.
5. UNDERTAKING OF LICENSOR
Licensor shall:
1. Use best efforts to promote the Products and Services including
national and local advertising as it deems appropriate.
2. Provide to Distributor's technical and sales staff technical and sales
training with respect to the Products and Services, to consist of one
two-week training course offered at Licensor's field training center or
at Distributor's facilities. Licensor shall provide such training at
its own cost, but Distributor shall be responsible for travel and
living expenses incurred by its employees.
3. Provide reasonable quantities of marketing materials, including
descriptive brochures and promotional materials suitable for
unrestricted distribution, and licenses and other contractual
documents.
4. Evaluate the qualifications of prospective customers solicited by
Distributor. Licensor may condition acceptance of customer contracts on
a customers' payment in advance of all or part of applicable license
fees and service fees.
5. Perform all obligations of Licensor under accepted customer contracts.
6. Invoice and collect amounts payable under each customer contract
accepted by Licensor.
7. Provide Product development, enhancement, and product problem
resolution as Licensor deems appropriate, but in all events sufficient
to enable Licensor and Distributor to perform their obligations under
accepted customer contracts.
8. Provide migration factory management and operations.
9. Provide Products and Services in a manner which does not lead to added
delays, costs or expenses to Distributor.
10. Use its best efforts to increase Product and Service capacity, and
improve the quality of its Products and Services.
11. Use its reasonable best efforts, consistent with its past practices, to
protect all of its intellectual property rights, including, without
limitation, trade secrets, know-how, patents, copyrights and
trademarks, and take strict precautions to protect the confidential and
proprietary status of all current and future information relating to
the Products and Services.
6. COMPENSATION
6.1 Distributor shall receive a fee equal to [***] of the revenue actually
collected by Licensor under customer contracts solicited by
Distributor and accepted by Licensor. At Licensor's expense,
Distributor agrees to reasonably cooperate with Licensor and
reasonably assist in the collection of accounts receivable under
customer contracts forwarded to Licensor by Distributor, provided,
however, that Distributor shall not be required to commence or
prosecute any litigation in connection with any such collection
assistance. Payment of Distributor's compensation shall be made by
Licensor within [****] after receipt of revenues by Licensor. Payment
shall be accompanied by a detailed accounting of the basis for such
payment, identifying the source and amount of applicable revenues so
received by Licensor.
3
6.2 Distributor shall have the right, at its sole expense, to examine the
books and records of Licensor to verify Licensor's calculation of the
compensation due to Distributor. Such examinations may be made no more
frequently than once every six months and may cover only the prior two
years books and records. All such examinations shall be conducted by a
certified public accountant upon not less than two business days prior
written notice to Licensor, during Licensor's regular business hours.
6.3 Distributor shall be responsible for its own expenses and costs in
fulfilling it duties under this Agreement, including, without
limitation, office rent, salaries and commissions of office help and
sales people in its employ, licenses, taxes, insurance, automotive
costs, transportation and living expenses. Distributor shall supply
appropriate commercial and general liability insurance needed to
fulfill its duties under this Agreement. Distributor indemnifies and
holds harmless Licensor from any claims, costs, losses or damages,
including attorneys' fees, resulting from workers' compensation
claims, or other claims of or relating to Distributor's employees.
7. TERRITORY
The territory of this Agreement shall be the states of Texas. Any disputes
arising out of this paragraph will be settled solely by Licensor.
8. TERM OF EXCLUSIVITY AND EXTENSION OF EXCLUSIVITY
The period of exclusivity of this Agreement is one year from the date of
Commencement. In the event that Distributor causes at least [****] customer
contracts valued at [****] or more each to be executed with Customers during the
the first year after Commencement, and during each subsequent year thereafter,
then the one year period of exclusivity described in this Agreement will be
automatically extended to the end of the subsequent year.
9. TERM AND TERMINATION
9.1 The term of this Agreement shall commence upon the date of execution
of this Agreement and shall continue for five (5) years thereafter
unless sooner terminated in accordance with the provisions hereof.
This Agreement may be thereafter extended only by written instrument
executed by both parties.
9.2 Licensor may terminate this Agreement upon written notice to
Distributor in the event of the breach of any material obligation
hereunder by Distributor that is not cured by Distributor after
receipt from Licensor of [****] written notice calling attention to
such breach and demanding cure thereof. In the event of such
termination for cause, Licensor's sole obligation to Distributor shall
be to pay compensation accrued for revenues collected prior to the
date of termination.
9.3 Distributor may terminate this Agreement upon written notice to
Licensor in the event of the breach of any material obligation
hereunder by Licensor that is not cured by Licensor after receipt from
Distributor of [****] written notice calling attention to such breach
and demanding cure thereof. In the event of such termination for
cause, Licensor's obligation to Distributor shall be to pay
compensation accrued for revenues collected prior to the date of
termination.
9.4 Upon termination of this Agreement for any reason, Distributor shall
within [****] of such termination return to Licensor all copies of the
Products, including demonstration copies, and all copies of technical
materials, brochures, marketing materials, and the like. Distributor
shall further provide to Licensor copies of Distributor's prospect
files and customer correspondence files.
Upon the termination of this Agreement for any reason, Distributor shall
immediately cease using all trademarks, services marks, software and
documentation of Licensor.
10. INDEMNITIES
10.1 Licensor hereby indemnifies Distributor from and against any and all
claims, demands or actions (collectively "Claims") arising from
Distributor's participation as a distributor of Licensor's products or
services, except to the extent that such Claims are attributable to
the act or omission of Distributor or its employees or
representatives.
10.2 Distributor hereby indemnifies Licensor from and against any and all
claims, demands, or actions arising out of Distributor's activities or
performance outside the express authorization provided Distributor
under this Agreement or any customer contracts or any breach of
Distributor's obligations hereunder.
10.3 The indemnities contained in this Section 10 shall be conditioned upon
the indemnifying party's receiving (1) prompt written notice of any
claims, demands, or actions for which indemnity is sought; (2)
cooperation in the defense by the party seeking indemnity; and (3)
control of the defense and/or settlement of such claim, demand, or
action as to which indemnity is sought.
11. LIMITATIONS OF LIABILITY
In no event shall either party hereto be entitled to special, indirect, or
consequential damages, including lost profits, for breach of this Agreement.
Remedies shall be limited to claims for amounts due hereunder, for
indemnification as provided for herein or for actual damages resulting from any
such breach. However, the foregoing limitation of remedies shall not apply to
any action by Licensor for infringement of any intellectual property right by
Distributor; any action based on or with respect to unauthorized publication,
disclosure, or use of Confidential Information (see paragraph 14) or trade
secrets of Licensor; or any claim pursuant to paragraph 7.2 (employee claims) of
this Agreement; or any action based on Licensor's rights in copyrights,
trademarks, or trade names or other proprietary rights in the Products or
Services.
12. TRADEMARK
Except for purposes of identification of Products or Services, no right, title,
interest, or license in or to any trademark or service xxxx of Licensor is
granted to Distributor under this Agreement. Distributor may on its business
cards state that Distributor is an authorized distributor for the licensing of
the Products and provision of Services of Licensor. Distributor shall not
contest the validity of such marks or Licensor's exclusive ownership of them.
During the term of this Agreement, Distributor shall not adopt, use, or
register, whether as a corporate name, trademark, service xxxx or other
indication of origin, any such marks, or any word or xxxx confusingly similar to
them in any jurisdiction.
13. ENHANCEMENTS AND DISCOVERIES
If Distributor makes any discoveries, devices or other tangible or intangible
improvement relating to Products or Services, Distributor shall immediately
disclose same to Licensor, and hereby assigns all rights, title and interest in
same to Licensor. Distributor shall secure assignment agreements with its
employees to ensure that same can be assigned to Licensor.
14 CONFIDENTIALITY
"Confidential Information" shall mean any information disclosed by Licensor to
Distributor, in writing, orally, by inspection of tangible objects or by
inspection of source code, object code or operation of any Product or related
Services, including without limitation, any product, technical, manufacturing,
process, marketing, financial, business or other information, ideas or know-how.
Confidential Information may also include information disclosed to Licensor by
third parties. Confidential Information shall not include information which: (i)
was generally known and available in the public domain at the time it was
disclosed, or becomes generally known and available in the public domain through
no fault of the receiving party, its employees, agents, successors or assigns;
(ii) was known to the Distributor at the time of the disclosure; (iii) was
independently developed by Distributor without the use of or reliance on any
Confidential Information, as shown by written records contemporaneously with
such independent development; (iv) becomes known to Distributor from a third
party who has no obligation of confidentiality to the Licensor.
Distributor shall not disclose Confidential Information to any third party
unless authorized in advance in writing, except (i) to potential and actual
customers of the Products and Services in connection with Distributor's
marketing of the Products and Services and performance of its duties and
obligations under this Agreement, (ii) in response to a subpoena or other legal
process, and (iii) as may otherwise be required by applicable law. Distributor
shall not disclose Confidential Information to its employees, except on a "need
to know" basis where such disclosure is necessary and required to exercise it
rights and perform its obligations under this Agreement. Distributor shall not
disclose Confidential Information to any employee of Distributor unless such
employee has signed a non-use and non-disclosure agreement in content at least
as protective as the provisions hereof, prior to any disclosure of Confidential
Information to such employee. Distributor shall take reasonable measures to
protect the secrecy of and avoid disclosure and unauthorized use of the
Confidential Information. Without limiting the foregoing, Distributor shall take
at least those measures that it takes to protect its own most highly
confidential information. Distributor shall not reverse engineer, disassemble or
decompile any prototypes, software or other tangible objects which embody the
Confidential Information and which are provided to Distributor hereunder.
Distributor shall immediately notify Licensor in the event of any unauthorized
use or disclosure of the Confidential Information. This obligation in this
paragraph shall survive the expiration or termination of this Agreement for any
reason.
Upon termination of this Agreement for any reason, Distributor shall promptly
return all Confidential Information received from Licensor.
15 NO FRANCHISE
Neither this Agreement, nor any terms and conditions contained herein, shall be
construed as creating a partnership, joint venture or agency relationship or as
granting a franchise as defined in 16 CFR Section 436.2(a), or applicable state
law. The price and payment described in this Agreement shall be construed as a
royalty fee for the rights granted in this Agreement, and not as a franchise
fee.
16. UCC
LICENSOR MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, WHETHER ORAL OR
WRITTEN, WHETHER EXPRESS OR IMPLIED, OR ARISING BY STATUTE, CUSTOM, COURSE OF
DEALING OR TRADE USAGE, WITH RESPECT TO THE PRODUCTS OR SERVICES, OR OTHERWISE
IN CONNECTION WITH THIS AGREEMENT. LICENSOR SPECIFICALLY DISCLAIMS ANY AND ALL
IMPLIED WARRANTIES OR CONDITIONS OF TITLE, MERCHANTIBILITY, SATISFACTORY QUALITY
AND FITNESS FOR A PARTICULAR PURPOSE, AND ALL WARRANTIES OF NON- INFRINGEMENT.
17. STATUS OF DISTRIBUTOR'S PERSONNEL
Distributor shall be responsible for the wages, hours, and conditions of
employment of Distributor's personnel during the term of and under this
Agreement. Nothing herein shall be construed as implying that employees of
Distributor are employees of Licensor.
18. NOTICES
All notices, demands, or consents required or permitted under this Agreement
shall be in writing and shall be delivered personally or sent by certified or
registered mail, postage prepaid, to the appropriate party at the address set
forth in the first paragraph of this Agreement or at such other address as shall
be given by either party to the other in writing.
19. CHOICE OF LAW
This Agreement shall be deemed to be made in the State of California and in all
respects shall be interpreted, construed, and governed by and in accordance with
the laws of the State of California. The venue for any law suits involving
disputes under this Agreement shall be in the Northern District of California or
the County of San Francisco. The prevailing party in any such dispute shall be
entitled to recover its costs and reasonable attorneys' fees.
20. WAIVER OF RIGHTS
The waiver by either party of any term or provision of this Agreement shall not
be deemed to constitute a continuing waiver thereof nor of any further or
additional rights such party may hold under this Agreement.
21. NO ASSIGNMENT; ENFORCEABILITY
This Agreement is personal to Distributor and is not assignable without the
prior written consent of Licensor. Any attempt to assign, transfer, or
subcontract any of the rights, duties, or obligations of this Agreement without
such consent is void. If any provision or provisions of this Agreement shall be
held to be invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
22. ARBITRATION
Any controversy or claim arising out of, in connection with or relating to this
Agreement, or the formation or breach hereof shall be resolved by binding
arbitration pursuant to the rules then in effect of the American Arbitration
Association and the State of California, with the cost thereof shared equally by
the parties; the venue of any arbitration or litigation relating to any such
controversy or claim shall be San Francisco, California, and the parties consent
to the jurisdiction of any court therein. In the event of litigation or
arbitration between the parties concerning this Agreement, the prevailing party
shall be entitled to its reasonable attorneys' fees.
23. COMPLETE AGREEMENT
The parties agree that this Agreement is the complete and exclusive statement
thereof between the parties and that it supersedes and merges all prior
proposals and understandings and all other agreements, whether oral or written,
between the parties relating to the subject matter hereof. This Agreement may
not be modified or altered except by a written instrument duly executed by the
parties hereto.
24. SUCCESSORS AND ASSIGNMENT
Neither party may assign any of its rights nor delegate any of its obligations
hereunder without the prior written consent of the other, although such consent
shall not be unreasonably withheld. All of the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
(including any purchaser of the business of Licensor or Distributor) and their
successors in interest by merger or operation of law.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as set
forth below.
Y2K Solutions, L.P. FORECROSS CORPORATION
By: CMM Financial, LLC
/s/ Xxxxxx X. Xxxxxxx /s/ Xxxxxxxxxx X. Xxxxxxxx
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(authorized signature) (authorized signature)
Xxxxxx X. Xxxxxxx Xxxxxxxxxx X. Xxxxxxxx
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(name) (name)
CEO Senior Vice President
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(title) (title)
3/24/97 3/25/97
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(date) (date)
