Exhibit 10.9
AMENDED AND RESTATED
SOFTWARE ASSIGNMENT AND GRANT-BACK LICENSE,
MAINTENANCE, AND SUPPORT AGREEMENT
This Amended and Restated Software Assignment and Grant-Back License,
Maintenance, and Support Agreement (this "Agreement") is effective as of
November 4, 1999, and amends and restates the agreement as originally entered
into effective as of November 4, 1999 (the "Effective Date"), by and between
Intek Information, Inc., a Delaware corporation ("Intek"), having its principal
place of business located at 0000 XXX Xxxxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxxxxxxx
00000-0000, and Spider Technologies, Inc., a Delaware corporation ("Spider"),
having its principal place of business located at 0000 XXX Xxxxxxx, 00xx Xxxxx,
Xxxxxxxxx, Xxxxxxxx 00000-0000.
WHEREAS, Intek has developed certain computer software that Intek uses to
provide communications services on behalf of its customers, particularly in the
financial services and high technology markets, which computer software is more
particularly described in Attachment A hereto (the "Software"); and
WHEREAS, Intek expects to use the software licensed to it hereunder in
connection with providing various forms of direct to the customer outsourced
services, including call center, e-commerce, help desk, live chat, technical
support, customer support and sales (collectively the "Operational Services")
and in connection with providing integrated systems and integrating services for
the Operational Services for Intek and its current and future customers.
WHEREAS, Intek allowed Spider to use the Software during the period July 1,
1999 through the Effective Date, and Spider now wishes to acquire the entire and
exclusive right, title and interest in and to the Software;
WHEREAS, Intek wishes to obtain a license back from Spider to use the
Software, in its current form and as it may be modified and updated from time to
time, to continue to provide the Operational Services to Intek's current and
future customers and otherwise for Intek's internal business purposes, and
Spider wishes to grant such a license to Intek; and
WHEREAS, Intek wishes to obtain certain maintenance and support services
for the Software from Spider, and Spider wishes to provide such services to
Intek.
NOW, THEREFORE, in consideration for the mutual promises and covenants
contained in this Agreement and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, Intek and Spider hereby
agree as follows:
1. Assignment.
1.1 Intellectual Property Rights Assigned. Intek hereby assigns,
transfers, conveys and quit claims to Spider all of Intek's Proprietary Rights,
with the exception of the rights set forth in
Section 1.2 below, and all causes of action heretofore accrued in Intek's favor
for infringement of the foregoing rights, to have and to hold the same unto
Spider, its successor and assigns. For purposes of this Agreement, "Proprietary
Rights" means all rights, title and interest in and to intellectual property,
including, without limitation, all patent rights, copyright rights (including,
without limitation, U.S. copyright registration applications), trade secret
rights and all other intellectual property and proprietary rights anywhere in
the world consisting or protecting any portion of, or directly related to, the
Software or use of the Software. Notwithstanding any provision to the contrary
set forth in this Section 1.1, if Intek informs Spider that, in order to fulfill
its obligations under Section 12 of this Agreement, Intek has reasonably
determined that it would be advisable for Intek to assert, as a counterclaim,
against a third party any cause of action that Intek has assigned to Spider
under this Section 1.1, Spider shall, in its reasonable discretion, either (i)
assert such counterclaim on its own and Intek's behalf, or (ii) assign such
cause of action to Intek for the purpose of permitting Intek to assert such
counterclaim. Intek has executed, with some of its employees and individuals who
are contractors, agreements providing for Intek's ownership of certain
inventions, protecting the confidentiality of Intek's proprietary information
and limitations on engaging in competitive activities. Intek hereby assigns to
Spider (to the extent assignable) the benefit of such agreements as they relate
to the Proprietary Rights assigned hereunder and the business of Intek
transferred to Spider as a part of the spin-off of the capital stock of Spider
to the stockholders of Intek, but not any obligation or liability under such
agreements, and reserves to itself all other rights, benefits, obligations and
liabilities of such agreements. Intek shall have no liability to Spider on
account of any such agreement being unenforceable against the employee or
individual contractor. If Spider asserts any of its rights under such
agreements, it shall be solely responsible for any claims against it in respect
of the rights being asserted.
1.2 Intellectual Property Rights Not Assigned. Notwithstanding any
provision to the contrary contained in this Agreement, Intek and Spider
acknowledge and agree that Intek is not assigning or licensing to Spider under
this Agreement the following:
(i) any rights in or to any and all trademarks and/or service marks
relating to the Software that Intek has obtained or is in the process of
obtaining under common, state or federal law, and any other such trademarks
and/or service marks in which Intek has rights as of the Effective Date
(the "Intek Marks");
(ii) certain Software applications and versions of the Software that
Intek created for customers prior to the Effective Date that are set forth
on Attachment B to this Agreement under the heading "Customized Software"
(the "Customized Software");
(iii) Software licenses or use rights that Intek has granted to its
customers as of the Effective Date that are set forth on Attachment B to
this Agreement under the heading "Existing Licenses," (the "Existing
Licenses") (such Existing Licenses shall effectively become sublicenses as
provided in Section 3.8 hereof); and
(iv) components of the Software that Intek licensed from third
parties and that are set forth on Attachment C to this Agreement (the
"Third Party Software").
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2. Further Assurances. Intek shall simultaneously sign the Memorandum of
Assignment of Copyright in the form of Attachment F attached hereto. An
executed copy of such Memorandum of Assignment of Copyright may be filed with
the United States Copyright Office by either party at any time. At any time,
and from time to time, hereafter Intek shall forthwith, upon Spider's written
request, take any and all steps to execute, acknowledge and deliver to Spider
any and all further instruments and assurances necessary or expedient in order
to vest the assigned rights and causes of action more effectively in Spider and
to facilitate Spider's enjoyment and enforcement of said rights and causes of
action. Intek hereby appoints Spider as Intek's true and lawful attorney-in-
fact, with full power of substitution, in Intek's name and stead, to take any
and all steps, including proceedings at law, in equity or otherwise, to execute,
acknowledge and deliver any and all instruments and assurances necessary or
expedient in order to vest or perfect the aforesaid rights and causes of action
more effectively in Spider, as such rights and causes of action relate to the
Proprietary Rights granted to Spider under Section 1.1 of this Agreement.
Notwithstanding any provision to the contrary set forth in this Section 2:
(i) Spider shall not incur any liability on Intek's behalf or take
any action that could, with reasonable foreseeability, cause Intek to incur
any liability; and
(ii) for the first eighteen (18) months following the Effective Date
(the "Initial Period"), Intek shall take any and all such steps as Spider
may request under this Section 2 at no cost to Spider; provided, however,
that, following the Initial Period, Spider shall compensate Intek for any
and all assistance that Spider may request under this Section 2, with such
compensation to include travel expenses and other reasonable and documented
out-of-pocket expenses, including, but not limited to, base salary and
fringe-benefit expenses to Intek for time expended by Intek's officers and
employees in providing such assistance, with such base salary and fringe-
benefit expense not to exceed one hundred and fifty dollars ($150.00) per
officer or other employee per hour.
3. License Grant.
3.1 Software Object Code. Subject to all of the terms and conditions of
this Agreement, Spider grants to Intek a nonexclusive, irrevocable (except as
provided herein), royalty-free, fully paid-up, non-sublicensable (except as
permitted under Section 3.8 below), perpetual, and worldwide license (the
"Software License") to:
(i) install and use the object code (for purposes of this Agreement
the term "object code" includes executable code) of the Software (a) for
all purposes for which the Software reasonably was intended to function,
and (b) in conjunction with the computer systems of Intek and its
customers, including, but not limited to, inventory management systems,
just-in-time delivery systems, order fulfillment systems, management and
accounting systems, and demographic data collection systems, to support
Intek's past, current, and future business of providing Operational
Services;
(ii) copy the object code of the Software as reasonably necessary
for back-up and disaster-recovery purposes, and
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(iii) integrate any object code of the Software into any Software
integrated system (for purposes of this Agreement, the term "integrated
system" shall mean any hardware and software products which have Value-
Added by Intek for Intek or any of its current and future customers; and an
integrated system shall be regarded as having "Value-Added" if at least the
following materials are included as part of the integrated system: (A) non-
Intek and non-Spider developed software (which may be Intek's, the
customer's or the customer's own vendor's, customer's or business
affiliate's software, or third party software which does not change the
core functionality of the Software), (B) Intek programming or Intek
consulting services, and (C) any portion of the Software or the Developed
Software).
3.2 Software Source Code. Subject to all of the terms and conditions of
this Agreement, Spider grants to Intek a nonexclusive, royalty-free, fully paid-
up, non-sublicensable (except as permitted under Section 3.8 below), and
worldwide license (the "Software Source Code License") to use the source code of
the Software:
(i) subject to Section 6.3 for a period of eighteen (18) months
following the Effective Date, to prepare minor modifications of the
Software (including bug fixes, patches, and interfaces) as permitted under
Section 4.1 below; provided, however, that the right under this license to
prepare minor modifications of the Software in connection with providing
integrated systems or integrating services shall be for a period of twenty
(20) years from the Effective Date; and Intek shall be entitled to so much
of the Software Source Code as is reasonably necessary for interfacing or
linking the Software to, or otherwise working with the Software in support
of, an integrated system or otherwise as necessary to support integrating
services:
(ii) In the event (but only in the event) of Abandonment of the
Software, as defined in Section 3.7 below, for so long as Intek uses the
Software in its business of providing the Operational Services, to produce
the object code of the Software, to correct errors and otherwise to
maintain and support the Software, to host the Software for Intek customers
who are customers (or have executed an agreement to become a customer) as
of the date of the notice from Intek to Spider that Intek is exercising its
rights upon abandonment (an "Abandonment Existing Customer"), and to create
derivative works of the Software (but only to the extent necessary to
correct errors of any type in the Software, to create new applications
whether requested by Intek or an Abandonment Existing Customer, and to
modify the Software so that the Software will interoperate with computer
hardware, firmware, and third party software (including operating systems)
that Intek or an Abandonment Existing Customer may use in relation to the
Software from time to time) solely for Intek's own use or use by or with an
Abandonment Existing Customer provided further that, in the event (but only
in the event) that Spider dissolves its business, is liquidated, or there
is an Abandonment under Section 3.7. (ii) or (iii), Intek shall have the
right to create any type of derivative work whatsoever.
3.3 Developed Software Object Code. Subject to the terms and conditions of
this Agreement, Spider grants to Intek a nonexclusive, irrevocable (except as
provided herein), non-sublicensable (except as permitted under Section 3.8
below), and worldwide right and license, for a period of twenty (20) years from
the Effective Date (the "Developed Software License") to:
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(i) install and use the object code of the Developed Software (a)
for all purposes for which the Developed Software reasonably was intended
to function, and (b) in conjunction with the computer systems of Intek and
its customers, including, but not limited to, inventory management systems,
just-in-time delivery systems, order fulfillment systems, management and
accounting systems, and demographic data collection systems, to support
Intek's past, current, and future business of providing the Operational
Services; and
(ii) copy the object code of the Developed Software as reasonably
necessary for back-up and disaster-recovery purposes;
(iii) integrate any object code of the Developed Software into any
Developed Software integrated system (for purposes of this Agreement, the
term "integrated system" shall mean any hardware and software products
which have Value-Added by Intek for Intek or any of its current and future
customers; and an integrated system shall be regarded as having "Value-
Added" if at least the following materials are included as part of the
integrated system: (A) non-Intek and non-Spider developed software (which
may be Intek's, the customer's or the customer's own vendor's, customer's
or business affiliate's software, or third party software which does not
change the core functionality of the Developed Software), (B) Intek
programming or Intek consulting services, and (C) any portion of the
Software or the Developed Software).
The Developed Software License shall be royalty free for the first three
(3) years following the Effective Date; thereafter (so long as Intek is
licensing the Developed Software), Intek shall pay Spider during the remainder
of the twenty (20) year license period a fee based on "most favored nations
pricing" in accordance with the current industry standards and Spider's
historical pricing for the applicable version of the Developed Software (the
"Fee"). The parties further agree that there shall be an equitable adjustment
to the Fee by which the Fee shall be reduced by the amount attributable to the
value of any modifications constituting an interface made by or on behalf of
Intek or by a customer of Intek as contemplated by Section 4.1 or otherwise.
Intek has no obligation to license the Developed Software.
The term "Developed Software" means software developed by or on behalf of
Spider based upon or as an evolution of the Software, even if such software
involves significant improved, different, or expanded functionality, bears a
different name other than the Software or has a different version or release
number, together with all user documentation for such software product.
3.4 Developed Software Source Code. Subject to all of the terms and
conditions of this Agreement, Spider grants to Intek a nonexclusive, royalty-
free, fully paid-up, non-sublicensable (except as permitted under Section 3.8
below), and worldwide license (the "Developed Software Source Code License") to
use the source code of the Developed Software:
(i) subject to Section 6.3 for a period of eighteen (18) months
following the Effective Date, to prepare minor modifications of the Developed
Software (including bug fixes , patches, and interface) as permitted under
Section 4.1 below provided, however, that the right under this license to
prepare minor modifications of the Developed Software in connection with
providing integrated systems or integrating services shall be for a period of
twenty (20) years from the Effective
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Date; and Intek shall be entitled to so much of the Developed Software Source
Code as is reasonably necessary for interfacing or linking the Software or
Developed Software to, or otherwise working with the Software in support of, an
integrated system or otherwise as necessary to support integrating services.
(ii) In the event (but only in the event) of Abandonment of the
Software, as defined in Section 3.7 below, for so long as Intek uses the
Developed Software in its business of providing the Operational Services, to
produce the object code of the Developed Software, to correct errors and
otherwise to maintain and support the Developed Software, to host the Developed
Software for Intek customers who are Abandonment Existing Customers, and to
create derivative works of the Developed Software (but only to the extent
necessary to correct errors in the Developed Software, to create new
applications whether requested by Intek or an Abandonment Existing Customer, and
to modify the Developed Software so that the Software will interoperate with
computer hardware, firmware, and third party software (including operating
systems) that Intek or an Abandonment Existing Customer may use in relation to
the Developed Software from time to time) solely for Intek's own use or use by
or with an Abandonment Existing Customer provided further that, in the event
(but only in the event) that Spider dissolves its business, is liquidated, or
there is an Abandonment under Section 3.7. (ii) or (iii), Intek shall have the
right to create any type of derivative work whatsoever.
If at any time during the term of this Agreement Spider determines, in its
sole discretion, that Spider generally shall grant to third parties licenses to
use any source code of the Developed Software, Spider shall, at Intek's request,
grant to Intek a license to use such source code under "most favored nations"
terms, conditions and pricing.
3.5 Reserved.
3.6 Termination of Software Source Code and Developed Software Source Code
Licenses. Notwithstanding any provision to the contrary set forth in this
Agreement, unless there has been a prior release or a pending request for
release of the Deposit under Section 15.4, the Software Source Code License and
the Developed Software Source Code License automatically shall terminate upon
the acquisition of all, or substantially all, of the assets of Intek, or upon
the assumption of "Control" (as defined below) of Intek, by any business entity
that (i) is a "Competitor" (as defined below) of Spider or (ii) it is likely
will jeopardize the confidentiality of the source code of the Software or the
Developed Software. For purposes of this Section 3.6, "Control" means the
ownership or control, directly or indirectly, of forty-five percent (45%) or
more of all of the voting powers of the shares (or other securities or rights)
entitled to vote for the election of directors or the business entity has
appointed a majority of the members of the Board of directors of Intek. Intek
may at any time request in writing Spider's determination as to whether a
particular business entity is (at the time of such request) a Competitor of
Spider or has Control of Intek or if the acquisition of all, or substantially
all, of the assets of Intek by such entity, or its assumption of control of
Intek jeopardizes the confidentiality of the source code of the Software or the
Developed Software. Such request will be accompanied by all of the information
respecting such business entity (including but not limited to its current and
planned business activities and products) that is necessary or appropriate for
Spider to make such determination. Spider will notify Intek of its
determination no later than fifteen (15) days after its receipt of Intek's
request; provided that all of
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the information required to make such determination is provided to Spider at the
same time as Intek's request. A subsequent change in the business activities of
such entity shall have no effect and shall not result in any termination under
this Section 3.6. An entity is a "Competitor" of Spider if it and its
subsidiaries on a consolidated basis had revenue during the prior four completed
quarters (on a calendar year basis) of $10,000,000 or more from the sale or
licensing of software products that compete with the Software or Developed
Software.
3.7 Abandonment. An "Abandonment" of the Software or the Developed
Software, triggering Intek's right to create derivative works of the source code
of the Software or the Developed Software under Section 3.2(ii) or Section
3.4(ii), respectively, shall be deemed to have occurred if Intek is in full
compliance in all material respects with the provisions of this Agreement and:
(i) Spider fails materially and substantially to fulfill its
maintenance and support obligations under Sections 15.1, 15.2, and 15.3 of
this Agreement with respect to the Software or the Developed Software, as
the case may be, for a period of no fewer than thirty (30) sequential days
and does not rectify such failure within fifteen (15) additional days
following Spider's receipt of written notice from Intek that Intek has
determined that such failure has occurred;
(ii) Spider substantially reduces the level of support for the
Developed Software by regularly not providing, as reasonably necessary,
error corrections (the absence of which corrections in the aggregate have a
more than insubstantial adverse affect on the business, finances or
reputation of Intek) to and new releases and versions thereof to continue
developing the Developed Software so as to keep the Developed Software up
to competitive industry standards.
(iii) Spider publicly announces or otherwise discloses to Intek that
Spider is discontinuing or phasing out all or substantially all of its
business of developing the Developed Software or supporting and maintaining
the same; or
(iv) The occurrence of a Priority A Error (as defined in Attachment
D) in the Developed Software lasting one (1) hour or more, after Intek
notifies Spider of such Error, on any twenty-five (25) days during a
calendar year, which in the aggregate have a more than insubstantial
adverse effect on the business, finances or reputation of Intek.
3.8 Sublicensing Rights. Subject to the limitations in Section 3.9, the
Software License and the Developed Software License each include the right to
sublicense the object code of the Software and the Developed Software, as the
case may be, to:
(i) any business entity (the "Joint Venture Entity") created for
the purposes of implementing a joint venture between Intek and a third
party, provided that Intek owns at least (a) fifty percent (50%) of all of
the voting powers of the shares (or other securities or rights) entitled to
vote for the election of directors or other governing authority, or (b) the
highest percentage of such voting powers permitted by law, but in no event
less than thirty-three and one third percent (33 1/3%), and, provided
further, that, unless the parties
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otherwise mutually agree, the primary purpose of the Joint Venture Entity
is to perform Operational Services;
(ii) customers to which Intek is providing Operational Services,
subject to the terms and conditions set forth in Section 4 below; and
(iii) any third party to which Intek has outsourced one or more of
the functions comprising the Operational Services.
Subject to the limitations in Section 3.9, the Software Source Code License
and the Developed Software Source Code License each include the right to
sublicense limited portions of the source code of the Software, to be identified
and mutually agreed upon by the parties from time to time, to Intek customers to
permit such customers to prepare minor modifications of the Software (including
bug fixes and patches) as permitted under Section 4.1 below; provided that each
such Customer is a permitted sublicensee under this Section 3.8 and provided
further that any portion of the source code may be sublicensed to any person to
whom the corresponding object code may be sublicensed upon a liquidation or
dissolution of Spider or an Abandonment under Section 3.7. (ii) or (iii).
3.9 Sublicensing Limitations. Notwithstanding any provision to the
contrary set forth in this Section 3 or otherwise in this Agreement, the rights
to sublicense set forth in Section 3.8 above are subject to the following
limitations:
(i) Intek shall provide Spider with no fewer than ten (10) days'
written notice prior to entering into any sublicense of the object code or
source code of the Software or the Developed Software, as the case may be,
specifying the Software, Developed Software, or component(s) thereof that
Intek intends to sublicense, and whether the code that Intek intends to
sublicense is object code, source code, or both (collectively, the
"Sublicense Programs") and the party to which (or whom) Intek intends to
sublicense the applicable programs;
(ii) Prior to the dissolution or liquidation of Spider or an
Abandonment under Section 3.7. (ii) or (iii) Spider shall have the right to
prohibit Intek from entering into any sublicense of the Sublicense Programs
if (a) the proposed sublicensee previously licensed any of the Sublicense
Programs directly from Spider and materially breached its license agreement
with Spider, (b) Spider reasonably determines that the proposed sublicensee
is a Competitor of Spider, or (c) the country in which the proposed
sublicensee is located or will operate the Sublicense Programs is not a
member of the Berne Convention;
(iii) Intek shall cause the proposed sublicensee to execute a
sublicense agreement with respect to the Sublicense Programs (the
"Sublicense Agreement"), which shall contain provisions concerning Spider's
Proprietary Rights in and to the Sublicense Programs and the
confidentiality of all Confidential Information (as defined in Section 14.1
below) of Spider that Intek provides to such sublicensee that are at least
as protective as those set forth in this Agreement, and Spider shall have
the right - and a reasonable opportunity - to approve all such provisions;
and
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(iv) Spider shall be a third party beneficiary of the Sublicense
Agreement with all rights necessary to enforce the same directly.
In addition to the foregoing limitations, the limitations set forth in
Section 5.4 below shall apply in connection with any sublicense of the object
code or source code of the Software and Developed Software by Intek.
3.10 Software Proprietary Rights. Subject to the terms and conditions of
this Agreement, Spider hereby grants to Intek a nonexclusive, royalty-free,
irrevocable (except as provided herein) fully paid-up, nonsublicensable,
perpetual and worldwide right and license (the "Proprietary Rights License")
under Spider's Proprietary Rights in and to the Software and the Developed
Software for the purpose of permitting Intek to exercise its rights granted
under this Section 3.
3.11 User Documentation. The right to use, modify, deliver, license or
sublicense Software or Developed Software, includes the right to use, modify (to
the extent necessary to reflect the modification of the Software or Developed
Software), deliver, license and sublicense the user documentation for such
software.
3.12 Royalties Still Owing. The delivery hereunder of source code to
Intek by Spider does not reduce Intek's monetary obligations to Spider under
this Agreement.
4. License Restrictions.
4.1 Modifications Requested by Intek Customer; Integrated Systems.
Notwithstanding any provision to the contrary set forth in Section 3 or
otherwise in this Agreement, Intek shall have the right to modify limited
portions of the source code (and generate new object code from the modified
source code) of the Software or the Developed Software to support Intek's use of
the Software or Developed Software, as the case may be, in Intek's business of
providing the Operational Services, or providing integrated systems and Intek
customers who are permitted licensees of the source code of the Software or the
Developed Software shall have the right to modify, or to have Intek modify,
limited portions of the source code (and generate new object code from the
modified source code) of the Software or Developed Software, as the case may be,
if:
(i) the modification(s) requested or sought to be implemented by
such customer are minor in nature and would not change any core
functionality of the Software or the Developed Software, as the case may
be; and
(ii) Except in the case of modification in connection with
implementing an integrated system, Intek or such customer has first
requested that Spider create such modifications and Spider has declined the
opportunity to do so. Spider shall notify Intek or such customer within ten
(10) business days after receiving the modification specifications from
Intek or such customer, as to whether it will create such modifications.
All modifications of the Software and the Developed Software, whether
created by Spider or by Intek shall be owned solely by Spider, unless the
parties otherwise agree in a written amendment to this Agreement, Spider has
been dissolved or liquidated, or there has been an
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Abandonment under Section 3.7. (ii) or (iii). In addition, Intek shall ensure
that all modifications of the Software and Developed Software developed by any
Intek customer who sublicenses from Intek the source code for the Software or
the Developed Software also shall be owned by Spider unless the parties
otherwise agree in a written amendment to this Agreement, Spider has been
dissolved or liquidated, or there has been an Abandonment under Section 3.7.
(ii) or (iii). Promptly following Intek's completion of any modifications of the
Software or the Developed Software, which are owned by Spider, except in the
case of a modification in connection with implementing an integrated system,
Intek shall deliver to Spider copies of such modifications (in source code and
object code form). Intek shall ensure that if any modifications of the Software
or the Developed Software are created by any Intek customer who sublicenses the
source code therefor from Intek, such customer shall deliver to Spider copies of
all such modifications of the Software or Developed Software, which are owned by
Spider, as the case may be. In addition, Intek shall (and shall ensure that each
of its sublicensees of any source code of the Software or Developed Software
shall), at Spider's request and expense, take any or all of the steps set forth
in Section 2 (with respect to the rights assigned to Spider under this
Agreement) to permit Spider to exercise its ownership rights under this Section
4. If a customer of Intek wishes to own the source and object code of any such
modification, which is owned by Spider, Spider and Intek shall confer in good
faith to determine whether to grant such customer's request.
Except as expressly permitted in this Agreement, Intek shall not disclose
any source code or source code documentation of the Software or Developed
Software to any third party in any circumstance or manner. In addition, except
as otherwise permitted herein, Intek shall not itself, or permit any sublicensee
of the Software or Developed Software from Intek, or cause any third party to,
reverse engineer, disassemble, decompile or otherwise attempt to reconstruct or
discover any source code or underlying ideas, algorithms, file formats,
programming or interoperability interfaces of any portion of the Software or
Developed Software. Any failure by Intek to comply with any restriction set
forth in this paragraph of Section 4.1 shall be deemed a material breach of this
Agreement.
4.2 Copyright and Other Notices. Intek shall reproduce and include the
copyright notice and any other notices that Spider places or requests Intek to
place on copies of the Software and the Developed Software (in object code or
source code form) including any documentation that Spider provides to Intek for
the Software or the Developed Software.
4.3 Government Matters. Intek shall comply with all applicable export
laws, restrictions, and regulations of the United States and any foreign country
in which Intek installs the Software, the Developed Software, or both, to the
extent that compliance with such foreign laws, restrictions, and regulations is
not in violation of applicable United States laws, restrictions, and
regulations. Intek further agrees not to export or reexport, or allow the export
or reexport of the Software, any Developed Software, any component of the
Software or Developed Software, any documentation relating to the Software or
the Developed Software in Intek's possession or that Spider provides to Intek
from time to time, or any Confidential Information (as defined in Section 14
below) in violation of any such laws, restrictions, or regulations, or to any
country subject to embargo or any person subject to restriction as to the
foregoing under the laws of the United States.
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5. Customer Referrals.
5.1 Mutual Referrals. For three (3) years following the Effective Date,
Intek shall provide to Spider the names, addresses, and any additional contact
information that Intek has for each Intek customer (including, but not limited
to, any existing Intek customer) that (or whom) expresses an interest in
acquiring a license to use the Software or the Developed Software, or any
portion thereof (each, an "Intek Referral"). Similarly, Spider shall provide to
Intek the names, addresses, and any additional contact information that Spider
has for each Spider customer that (or whom) expresses an interest in receiving
Operational Services from Intek (each, a "Spider Referral"). This Agreement does
not create any exclusive referral arrangement between the parties.
5.2 Referral Commissions. For three (3) years following the Effective
Date, Spider shall pay to Intek on a quarterly basis a percentage commission, to
be agreed upon by both parties, of the fees, less discounts, rebates, returns,
and sales or use taxes ("Spider Net Fees"), that Spider receives from licensing,
as well as sublicensing, the Software, the Developed Software, or both to each
such Intek Referral; provided, however, that the Spider Net Fees shall not
include fees that Spider receives from supporting, maintaining, modifying, or
providing other services in connection with the Software, Developed Software, or
both. Intek shall pay to Spider, on a quarterly basis, a percentage commission,
to be agreed upon by both parties, of the fees, less discounts, rebates,
returns, and sales or use taxes, and less the cost to Intek of resold or billed
through long distance service, if any such resale or xxxx through occurs,
("Intek Net Fees") that Intek receives from all Operational Services that Intek
provides to each such Spider Referral. The parties shall from time to time
mutually agree upon the percentage commissions that each party is to pay to the
other under this Section 5.2, based upon the percentage commissions that each
party would pay to a third party for performing the same or similar services,
and shall amend this Agreement, or otherwise execute a written document, to
reflect the percentage commissions agreed upon.
A party's obligation to pay a referral commission under this Section 5.2 is
conditioned upon the referred customer (1) not then being the subject of
discussions concerning a license of the Software and/or the Developed Software
or Operational Services, as the case may be, with such party or having been the
subject of such discussions within the prior ninety (90) days (each as shown by
written records) prior to the referral; (2) not then being an existing customer
of such party; and (3) not then being a direct parent or direct subsidiary of an
existing customer of such party, or a subsidiary of the direct parent of an
existing customer of such party.
Referral commissions shall be payable by a party hereunder only in respect
of revenue accrued by such party in respect of a particular customer during the
first month (or portion thereof) and the subsequent twenty-three (23)
consecutive full months.
5.3 Referrals. Spider agrees that it shall grant Intek Referrals
licenses to use the Software and Developed Software at fees no greater than the
average fees that Spider charges to its customers of comparable size and under
comparable terms and conditions ("Spider Fees") to license the Software and/or
the Developed Software.
11
5.4 Declined Referrals. If, during the three (3)-year period following
the Effective Date, Spider determines that Spider shall not license the
Software, Developed Software, or both to an Intek Referral, Intek shall have the
right to license the Software, Developed Software or both, as the case may be,
to such Intek Referral, provided that Intek (i) assumes all liability for such
Intek Referral's compliance with all of the terms and conditions of Spider's end
user license agreement for such Software or Developed Software or both, as the
case may be, (ii) pays to Spider the Spider Fees determined by Spider for the
license of such Software or Developed Software, or both, as the case may be, and
(iii) is subject to the sublicensing limitations set forth in subsections (i),
(iii), and (iv) of Section 3.9 above. Notwithstanding any provision to the
contrary set forth in this Section 5.4 or otherwise in this Agreement, Spider
shall have the right to prohibit Intek from sublicensing the Software, the
Developed Software, or both to an Intek Referral under the circumstances set
forth in subsection (ii) of Section 3.9 above. If Intek determines that Intek
shall not provide Operational Services to a Spider Referral, Spider shall have
the right to refer Spider Referrals to third party providers of services similar
to the Operational Services and to collect referral fees and commissions with
respect to such Spider Referrals without any obligation or liability to Intek.
6. Software and Developed Software Delivery.
6.1 Software Delivery. On the Effective Date, Intek shall deliver to
Spider all object code and source code of the Software that is the subject of
the assignment set forth in Section 1.1 above, together with all programmers'
notes and comments, design specifications, development specifications, user
documentation, error reports, and other materials relating to such Software (the
"Accompanying Documentation") that, as of the Effective Date, are located at
Intek's offices at 0000 Xxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx 00000, or that
otherwise are in Intek's possession or control as of the Effective Date. Intek
shall have the right to retain one (1) copy of the Software (in object code and
source code form) and documentation in order to exercise the Software License
and Software Source Code License set forth in Sections 3.1 and 3.2,
respectively.
6.2 Developed Software. Promptly upon the completion of the Developed
Software (including any update, fixes, patches, and new version thereof) to be
made generally available to Spider's licensees, Spider shall deliver to Intek
each of the following: (i) the object code of, and all user documentation that
Spider has developed for, such Developed Software, (ii) for a period of eighteen
(18) months following the Effective Date, the source code of, and all user
documentation that Spider has developed for, the Developed Software for use as
permitted in Section 3.4 and, thereafter, such portions of the Developed
Software source code and related documentation as may be mutually agreed upon by
the parties from time to time or as necessary for integration work as
contemplated in Section 3.2(i) or 3.4(i).
6.3 Redelivery During First 18 Months. If Intek is subject to the
Control of a Spider Competitor during the 18 month period specified in Sections
3.2(i) and 3.4(i), Intek shall deposit the source code and Accompanying
Documentation other than user documentation, for the Software and Developed
Software then in its possession pursuant to the escrow provided for in Section
15.5. In that case, Intek shall not retain any copies of the deposited
materials. The continued existence during the period materials are in escrow of
the Software Source Code License and the Developed
12
Software Service Code License, does not imply a right of Intek to reverse
engineer, decompile or otherwise gain access to source code except as
specifically provided herein.
6.4 Developer Notes Delivery. Upon a liquidation or dissolution of
Spider, or an Abandonment, Spider shall deliver to Intek a copy of all source
code for the Software and Developed Software, and at Intek's request a copy of
the programmer's notes and comments, design specifications, development
specifications, user documentation, error reports and other similar materials
relating to the Software and Developed Software, (collectively "Developer
Notes") to facilitate Intek's exercise of its rights hereunder in respect of the
Software and Developed Software. If a delivery to Intek is required hereunder,
such delivery must be made even if Intek is then subject to the Control of a
Spider Competitor.
7. Royalties
7.1 Developed Software Royalties. Spider shall pay to Intek a royalty in
the amount of four percent (4%) of Spider's Net Revenues generated from Spider's
distribution and licensing of the Software and Developed Software ("Royalties")
up to an aggregate amount of one million four hundred and fifty thousand dollars
($1,450,000), together with eight percent (8%) interest thereon per year (or
portion thereof) during which any portion of such aggregate amount remains
outstanding ("Aggregate Royalties"). Spider's obligation to pay Royalties shall
not commence until such time as Spider has generated five million five hundred
thousand dollars ($5,500,000) (the "Base Amount") in Net Revenues from
distribution and licensing of the Developed Software; provided, however, that
Spider's obligation to pay royalties shall commence at such time as Spider
raises seven million five hundred thousand dollars ($7,500,000) or more in
equity or convertible debt, regardless whether Spider has generated the Base
Amount in Net Revenues. Net Revenues shall be calculated only on revenue
generated after the Base Amount of sales or the $7,500,000 has been raised.
Thereafter, Spider shall pay Royalties to Intek at the end of each calendar
quarter (or applicable portion thereof), and shall provide to Intek with the
Royalties a report setting forth Spider's (i) gross revenues, (ii) discounts and
rebates granted by Spider, (iii) Software and Developed Software returns, and
(iv) sales, use, and similar taxes paid (or accrued) by Spider. For purposes of
this Section 7, "Net Revenues" means Spider's gross revenues from distribution
and licensing of the Developed Software, less such discounts, rebates, returns,
and sales, use, and similar taxes. Notwithstanding any provisions to the
contrary set forth in this Section 7.1 or otherwise in this Agreement, all
unpaid Aggregate Royalties then outstanding, if any, shall be due, regardless of
Net Revenues generated by Spider, upon the first to occur of (i) the end of five
(5) years from the Effective Date, or (ii) the closing date of the sale of all,
or substantially all, of the assets of Spider to a third party. Spider may pre-
pay the Aggregate Royalties at any time without penalty.
7.2 Examination of Spider's Books. Intek shall have the right, at its
own expense, for any period during which Spider owes to Intek any Royalties, and
for one (1) year following Spider's final payment of Royalties to Intek, to have
any one of the "big five" public accounting firms (Xxxxxx Xxxxxxxx, Deloitte &
Touche, Ernst & Young, KPMG, or PriceWaterhouseCoopers) or another independent
certified public accountant acceptable to Spider, examine not more than once per
year the relevant, previously unaudited financial books and records of account
of Spider during normal business hours and upon reasonable notice, to determine
or verify the Royalties and commissions under Section 5.2 payable to Intek under
this Agreement. As
13
a condition to such examination, the independent public accountant selected by
Intek shall execute a written agreement, reasonably satisfactory in form and
substance to Spider, to maintain in confidence all information obtained during
the course of any such examination, except for disclosure to Intek as necessary
for the purpose set forth in this Section 7.2. However, no such audit may be
required as to referral commissions unless Intek believes that the referral
commissions for the applicable year exceed fifty thousand dollars ($50,000).
7.3 Examination of Intek's Books. Spider shall have the right, at its
own expense, for any period during which Intek owes Spider any referral
commissions, and for one (1) year thereafter to have any one of the "big five"
public accounting firms (Xxxxxx Xxxxxxxx, Deloitte & Touche, Ernst & Young,
KPMG, or PriceWaterhouseCoopers) or another independent certified public
accountant acceptable to Intek, examine not more than once per year the
relevant, previously unaudited financial books and records of account of Intek
during normal business hours and upon reasonable notice, to determine or verify
the referral commissions payable to Spider under Section 5.2 of this Agreement.
As a condition to such examination, the independent public accountant selected
by Spider shall execute a written agreement, reasonably satisfactory in form and
substance to Intek, to maintain in confidence all information obtained during
the course of any such examination, except for disclosure to Spider as necessary
for the purpose set forth in this Section 7.3. However, no such audit may be
required unless Spider believes that the referral commissions for the applicable
fiscal year exceed fifty thousand dollars ($50,000).
7.4 Security Interest. In order to secure Spider's obligation to pay
Royalties to Intek, Spider shall grant to Intek the security interest in the
Proprietary Rights set forth in the Intellectual Property Security Agreement
(the "Security Agreement") of even date herewith. In connection with this
Agreement and such security interest, Spider has filed an application with the
U.S. Copyright Office to register the copyright for the Software . Thereafter,
Spider shall file an application with the U.S. Copyright Office to register the
copyright for each new major release, version and successor product of the
Software (including, without limitation, the Developed Software) promptly as
they become available.
8. Right of First Refusal; Stock Transfer Restriction; Non-compete.
8.1 Initial Offer by Spider. Spider may assign and sell all, or
substantially all, of Spider's right, title and interest in and to the Software
or Developed Software, and the Proprietary Rights therein ("Software Sale") to
any individual or entity other than Intek (a "Person") only on the conditions
set forth below in Sections 8.1 and 8.2: If Spider intends to enter into a
Software Sale with any such Person during the three (3) year period commencing
on the Effective Date, Spider must, prior to entering into the Software Sale
with such Person, provide Intek with a written offer (the "Offering Notice") to
enter into the Software Sale with Intek on the same terms and conditions under
which Spider is willing to enter into the Software Sale with such Person. The
written offer shall contain a brief description of the purchase price such
Person is willing to pay to Spider, as well as a brief description of any other
principal terms of the proposed Software Sale, including any financing terms and
the proposed closing date. Spider agrees to meet with Intek, at Intek's request,
within fifteen (15) days of Intek's receipt of Spider's written offer, to
discuss with Intek in greater detail the terms of the proposed Software Sale and
to answer such questions concerning the Software
14
Sale as Intek may reasonably pose to Spider. Intek shall have a period of
fifteen (15) days after such meeting in which to accept Spider's offer contained
therein or to make a counteroffer with respect to the Software Sale. Spider will
be obligated to enter into the Software Sale with Intek if Intek accepts the
offer set forth in the Offering Notice. If Intek accepts the offer contained in
the Offering Notice, Intek shall have thirty (30) days from the date on which
Intek accepts the offer set forth in the Offering Notice or until the proposed
closing date set forth therein, whichever is longer, in which to close the
Software Sale.
8.2 Counteroffer by Intek. Spider shall accept a counteroffer from Intek
if, in Spider's reasonable judgement, Intek's counteroffer is on terms at least
as favorable to Spider as those proposed in the Offering Notice. In determining
whether Intek's counteroffer is on terms at least as favorable to Spider as
those set forth in the offering notice, Spider's primary point of comparison
shall be the purchase price; provided, however, that other factors shall be
considered, such as whether an offer is all cash, the creditworthiness of the
Person proposing to enter into the Software Sale with Spider, and financing or
other contingencies. Spider also shall credit Intek in the amount of all
Royalties that remain to be paid to Intek under Section 7.1 and shall consider
other factors that are material to the value of the Software Sale in determining
whether Intek's counteroffer is on terms at least as favorable to Spider as
those set forth in the Offering Notice. If Spider and Intek cannot agree which
offer is superior, they shall submit the question to a valuation expert on which
they mutually agree to make the determination and shall abide by such
determination
8.3 Stock Transfer Restrictions. For a period of three years after the
Effective Date, Spider shall not assign title to, or grant any exclusive rights
in, the Software or Developed Software (or related documentation), to any Intek
Competitor (as defined below), nor shall Spider voluntarily permit any Intek
Competitor to acquire either direct or indirect control of Spider or beneficial
ownership of forty-five percent (45%) or more of any class or series of equity
securities of Spider (which includes debt or other interests exchangeable or
exercisable for, or convertible into, equity securities) or to otherwise acquire
the power to appoint a majority of the members of Spider's Board of Directors.
If Spider breaches the foregoing provisions of this Section 8.3, or within three
years of the Effective Date an Intek Competitor obtains beneficial ownership of
forty-five percent (45%) or more of any class or series of its equity securities
(whether before or after a public offering of Spider's securities) or otherwise
acquires the power to appoint a majority of the members of Spider's Board of
Directors, Spider shall be in breach of this Agreement and, in addition (without
limiting Intek's other rights or remedies hereunder), the three (3) year royalty
free term under Section 3.3 shall change to eight (8) years from the Effective
Date and/or Intek may have any Software or Developed Software (and related
documentation) including Developer Notes released from escrow to it (and the
escrow agreement between Intek and Spider shall so provide) and/or Intek may
seek injunctive relief to prohibit or rescind a transaction prohibited by the
first sentence of this Section 8.3.
An "Intek Competitor" is an entity (the term "entity" when used in this
Agreement includes without limitation associations and trusts) which itself with
its subsidiaries (on an consolidated basis), had revenue during the prior four
completed quarters (on a calendar year basis) of $10,000,000 or more from
providing Operational Services, (which term does not include integrated
systems). Spider may, at any time, request in writing Intek's determination as
to whether a particular
15
entity is (at the time of such request) a competitor of Intek or would be in
violation of the above portions of this Section 8.3. Such request will be
accompanied by all of the information respecting such entity including but not
limited to its current and planned business activities and products that is
necessary or appropriate for Intek to make such determination. Intek will notify
Spider of its determination no later than fifteen (15) days after its receipt of
Spider's request; provided that all of the information required to make such
determination is provided to Intek at the same time as Spider's request. A
subsequent change in the business activities of such entity shall have no effect
and solely because of that fact shall not result in a breach hereof or increase
the royalty-free term.
8.4 Restrictions on Spider Competitive Activities. For a period of two
(2) years after the Effective Date, Spider shall not itself, or through any
subsidiary of Spider, directly engage in Operational Services activity. The
parties recognize that the development, marketing, maintaining, servicing, and
other activities inherent in the software and integration business of Spider
mean that Spider will, by necessity, be assisting others to engage in
Operational Services activities, and such activity is not prohibited by this
Section 8.4. Spider is engaged in providing Operational Services activity for
purposes solely of this Section 8.4 only if more than ten percent (10%) of its
and its subsidiaries' aggregate net operating revenue in the prior four
completed quarters (on a calendar year basis), or $10,000,000 of its and its
subsidiaries net operating revenue during such time period, was received for
providing the live human interaction on behalf of a client of Spider or its
subsidiaries (by voice, fax, video or e-mail) with a purchaser of tangible or
intangible property or services sold by the client.
9. Intek's Representations, Warranties, and Covenant's; Disclaimer.
9.1 Title; Authority. Intek represents and warrants to Spider that, to
Intek's Knowledge, Intek has full title to the Proprietary Rights, together with
the Software (in object code and source code form) and Accompanying
Documentation to be delivered to Spider under this Agreement and the right to
convey title thereto to Spider free and clear of any and all liens, security
interests, and other encumbrances or restrictions upon transfer. Intek further
represents and warrants to Spider that Intek has full corporate power and
authority to enter into this Agreement and to perform its obligations hereunder.
For purposes of covenants, representations and warranties of Intek, "Knowledge"
means the actual, conscious knowledge of a senior officer of Intek, but excludes
officers of Intek (other than Xxxxxxx X. X'Xxxxxxx) who become employees of
Spider at or about the time of the entering into of this Agreement.
9.2 Infringement. Intek represents and warrants that, to Intek's
Knowledge, none of the Proprietary Rights, the Software (in object code or
source code form), or the Accompanying Documentation infringe any Proprietary
Rights of any third party.
9.3 No Claims. Intek represents and warrants to Spider that, to Intek's
Knowledge, there is no action, suit, proceeding, or material claim or
investigation pending or threatened against Intek in any court, or by or before
any federal, state, municipal, or other governmental department, commission,
board, bureau, agency, or instrumentality, domestic or foreign, or before any
arbitrator of any kind, that, if adversely determined, might adversely affect
any of the Proprietary Rights in and to the Software, the Software, or the
accompanying notes and documentation or otherwise
16
restrict Intek's ability to complete the transactions contemplated by this
Agreement or Spider's exercise of the rights granted to Spider under this
Agreement. Intek has no Knowledge of any basis for any such action, suit, claim,
investigation, or proceeding.
9.4 Use of Trademarks and Service Marks. Intek represents, warrants, and
covenants to Spider that for three (3) years after the Effective Date, Intek
shall not use the Intek Marks as an identifier for a software product in
connection with any distribution, licensing, marketing, or sale to any third
party of any computer software that is functionally similar to the Software, the
Developed Software, or both.
9.5 Third Party Software. Intek covenants and agrees to provide to
Spider all assistance that Spider requests in obtaining licenses to incorporate
the Third Party Software into the Developed Software. This obligation shall end
twelve (12) months after the Effective Date hereof and shall not require Intek
to incur any out-of-pocket expenses that Spider does not agree to reimburse or
to incur any material limitations on its business activities.
9.6 DISCLAIMER. EXCEPT AS OTHERWISE SET FORTH IN THIS SECTION 9, INTEK
IS PROVIDING THE PROPRIETARY RIGHTS, SOFTWARE, AND ACCOMPANYING DOCUMENTATION TO
SPIDER "AS IS," WITHOUT WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING,
BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE OR BY SAMPLE. THE COVENANTS, REPRESENTATIONS AND WARRANTIES
SET FORTH IN THIS SECTION 9 SHALL TERMINATE ONE (1) YEAR AFTER THE EFFECTIVE
DATE.
10. Spider's Representations, Warranties, and Covenants; Disclaimer
10.1 Title; Authority. Spider represents and warrants to Intek that
Spider has full corporate power and authority to enter into this Agreement and
to perform its obligations hereunder.
10.2 Software Representations and Warranties. As to Developed Software
and accompanying documentation, Spider shall make to Intek the representations
and warranties which Spider makes pursuant to its standard license, maintenance
and support agreements with Spider customers three (3) years from the date on
which royalties first become due and payable by Spider. As to claims first
accruing as to Developed Software and documentation delivered after three (3)
years from the date hereof, the limitations on liability of such standard
agreements shall replace the limitations on liability herein relating to such
Developed Software.
10.3 DISCLAIMER. EXCEPT AS OTHERWISE SET FORTH IN THIS SECTION 10, SPIDER
MAKES NO REPRESENTATIONS, WARRANTIES, OR COVENANTS TO INTEK OF ANY KIND, EXPRESS
OR IMPLIED, WITH RESPECT TO THE SOFTWARE OR DEVELOPED SOFTWARE, WHICH IS
PROVIDED TO INTEK "AS IS," WITHOUT WARRANTIES OF ANY KIND, OR OTHERWISE,
INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR BY SAMPLE. THE COVENANTS, REPRESENTATIONS
AND WARRANTIES SHALL
17
TERMINATE ONE (1) YEAR AFTER THE EFFECTIVE DATE, EXCEPT AS PROVIDED OTHERWISE IN
SECTION 10.2.
11. LIMITED LIABILITY. EXCEPT WITH RESPECT TO EACH PARTY'S INDEMNIFICATION
OBLIGATIONS UNDER SECTION 12 AND SECTION 13.1 OR CONFIDENTIALITY OBLIGATIONS
UNDER SECTION 14 BELOW, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY WITH
RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE,
STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR (I) ANY SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES OR LOST DATA, OR (II) THE COST OF
PROCUREMENT OF SUBSTITUTE GOODS, TECHNOLOGY OR SERVICES (EXCEPT THAT THIS
LIMITATION ON DAMAGES SHALL NOT APPLY TO LOST PROFITS, LOST BUSINESS, OR COSTS
OF PROCUREMENT, DUE TO AN INTENTIONAL BREACH HEREOF BUT THE FOLLOWING $5,000,000
AND $500,000 LIMITATIONS SHALL APPLY). EXCEPT WITH RESPECT TO EACH PARTY'S
INDEMNIFICATION OBLIGATIONS UNDER SECTION 12 AND SECTION 13 BELOW, OR A BREACH
OF EITHER PARTY'S COVENANTS UNDER SECTION 14, NEITHER PARTY SHALL BE LIABLE TO
THE OTHER PARTY FOR ANY AMOUNTS IN EXCESS OF FIVE MILLION DOLLARS ($5,000,000).
NO CLAIM SHALL BE MADE BY EITHER PARTY FOR BREACH OF ANY COVENANT,
REPRESENTATION, OR WARRANTY OF SECTION 9 OR 10, EXCEPT TO THE EXTENT THE AMOUNT
OF DAMAGES CLAIMED EXCEEDS FIVE HUNDRED THOUSAND DOLLARS ($500,000), IN WHICH
CASE ONLY DAMAGES IN EXCESS OF FIVE HUNDRED THOUSAND DOLLARS ($500,000) SHALL BE
RECOVERABLE.
12. Intek's Indemnification Obligations. Intek shall defend, indemnify, and
hold Spider and its officers, directors, agents and employees harmless from any
liability resulting from (i) the infringement and/or misappropriation by any
modifications or derivative works that Intek makes to the Software, the
Developed Software or associated user documentation, or that Intek requests that
Spider make to the Software or the Developed Software or associated user
documentation of any Proprietary Rights of any third party, to the extent such
infringement resulted from Spider's compliance with the detailed specifications
provided by Intek, or (ii) any breach of Intek's representations, warranties or
covenants set forth in Sections 9.1, 9.2, 9.3 or 9.4 above; provided that (a)
Spider promptly notifies Intek of any and all threats, claims and proceedings
related thereto, (b) Spider gives Intek, at Intek's expense, all reasonable
assistance including, without limitation, providing information, documents, and
access to Spider's employees at Intek's expense, and (c) Intek shall have sole
control of the defense and/or settlement thereof; provided, however, that Intek
shall not admit any liability or restriction on the part of Spider or enter into
any settlement that imposes any liability on Spider without Spider's prior
written consent. Spider shall be entitled to participate in any such action or
proceeding at its own expense, with counsel of its own choosing.
13. Spider's Indemnification and Use Disruption Obligations.
13.1 Spider's Indemnification Obligations. Spider shall defend, indemnify
and hold Intek and its officers, directors, agents and employees harmless from
any liability resulting from (i) the infringement and/or misappropriation by the
Developed Software (but not any underlying
18
infringement or misappropriation by the Software or the Proprietary Rights in
and to the Software) of any Proprietary Rights of any third party, (ii) any
breach of Spider's representations and warranties set forth in Section 10.1 or
10.2 above or (iii) for claims of Intek customers arising solely from services
rendered or goods delivered by Spider except for claims for which Spider is
specifically not liable hereunder; provided that (a) Intek promptly notifies
Spider of any and all threats, claims and proceedings related thereto, (b) Intek
gives Spider, at Spider's expense, all reasonable assistance including, without
limitation, providing information, documents and access to Intek's employees at
Spider's expense, and (c) Spider shall have sole control of the defense and/or
settlement thereof; provided, however, that Spider shall not admit any liability
on the part of Intek or enter into any settlement that imposes any liability or
restriction on Intek without Intek's prior written consent. Intek shall be
entitled to participate in any such action or proceeding at its own expense,
with counsel of its own choosing.
13.2 Spider's Use Disruption Obligations. If a third-party claim causes
the use of the Developed Software or any component thereof to be seriously
endangered or disrupted, Spider shall, in its sole, but reasonable,
determination, (i) replace the same without additional charge with compatible,
functionally equivalent and non-infringing software; (ii) modify the Developed
Software or component to avoid the claim of infringement and retain
functionality; (iii) obtain license(s) for Intek to continue use of the
Developed Software or component, and pay any additional fee required for such
license(s); or (iv) if none of the foregoing alternatives are practicable,
Spider pay terminate Intek's license to use the Developed Software or component
and pay to Intek all remaining Royalties then due and owing pursuant to Section
7.1 as soon as is reasonably possible.
13.3 Exceptions to Spider's Obligations. Notwithstanding any provision to
the contrary contained in this Section 13 or otherwise in this Agreement, Spider
shall have no obligations to Intek, or to any third party claiming through Intek
under this Section 13, if and to the extent that such claim arises from:
(i) Spider's modification of any Software, Developed Software, or
both in compliance with Intek's detailed specifications;
(ii) modification or derivative work of any Software, Developed
Software, or both other than by Spider or its contractors, or
(iii) combination of the Software, Developed Software, or both with
products, processes or materials other than those supplied by Spider, to
the extent that the alleged infringement or misappropriation relates to
such combination.
Spider shall also not have any obligation with respect to any third party
claim if Spider has provided Intek with modifications of the Software, Developed
Software, or both that would have avoided the problem, and Intek has not fully
implemented such modifications within a reasonable time.
14. Confidentiality
19
14.1 Disclosure of Confidential Information. Each party (a "Disclosing
Party") may, from time to time, in connection with its performance under this
Agreement, disclose confidential information, including, without limitation,
information comprising or relating to the Proprietary Rights, the Software, the
accompanying documentation, the Developed Software or other computer software
and the source code thereof, algorithms, trade secrets, know-how, processes,
techniques, ideas, improvements, inventions (whether or not patentable),
customer lists, and other technical, business, financial, customer and product
development plans, forecasts, strategies and information ("Confidential
Information") to the other party ("Receiving Party"). Each Receiving Party
agrees not to use (other than for purposes contemplated by this Agreement
including Intek's use of source code and Developer's Notes upon a liquidation or
dissolution of Spider or an Abandonment under section 3.7 (ii) or (iii), and
will use reasonable efforts to prevent the disclosure to third parties of, any
of the Disclosing Party's Confidential Information that is identified as
confidential at the time of disclosure and is provided in tangible form marked
"confidential" or "proprietary" (or is reduced to such form within thirty (30)
days after oral disclosure); provided, however, that the Proprietary Rights, the
source code of the Software and the Developed Software, and the Accompanying
Documentation shall be deemed Confidential Information of Spider.
Notwithstanding any provision to the contrary set forth in this Section 14.1,
each Receiving Party shall have the right to disclose the Disclosing Party's
Confidential Information: (i) to third party consultants who need to know such
Confidential Information in order to perform services permitted hereunder that
the Receiving Party has retained such consultants to provide, provided that such
consultants have entered into written confidentiality and nonuse agreements, of
which the Disclosing Party is a third party beneficiary with rights of direct
enforcement, with terms and conditions protecting the confidentiality of the
Disclosing Party's Confidential Information that are at least as stringent as
those set forth in this Agreement; and (ii) to authorized sublicensees of the
Software and Developed Software, to the extent the Confidential Information
consists of code architecture, literature, or diagrams, necessary to enable the
authorized sublicensee of the source code to modify, use, debug, prepare
patches, and add applications to the Software and Developed Software, as
permitted hereunder, provided that such sublicensees have entered into written
confidentiality and nonuse agreements, of which the Disclosing Party is a third
party beneficiary with rights of direct enforcement, with terms and conditions
protecting the confidentiality of the Disclosing Party's Confidential
Information that are at least a stringent as those set forth in this Agreement.
The Receiving Party's confidentiality obligation hereunder shall not apply to
information that the Receiving Party can document:
(i) was in the Receiving Party's possession or known by it prior to
receipt from the Disclosing Party;
(ii) is or (through no fault of the Receiving Party or any of its
employees, contractors, agents or licensees) becomes generally available to
the public;
(iii) is rightfully disclosed to the Receiving Party by a third party
having no obligations of confidentiality to the Disclosing Party, provided
that the Receiving Party complies with any restrictions imposed by such
third party;
(iv) is independently developed by the Receiving Party without use of or
reference to the Disclosing Party's Confidential Information; or
20
(v) is required by law or regulation to be disclosed (including, without
limitation, in connection with filings with the Securities and Exchange
Commission), provided that the Receiving Party uses reasonable efforts to
restrict disclosure, to obtain confidential treatment therefor, and to
notify the Disclosing Party of the compelled disclosure and to give the
Disclosing Party the opportunity to participate in proceedings contesting
such disclosure or seeking a protective order or confidential treatment
with respect thereto.
Notwithstanding the foregoing, all Confidential Information assigned to Spider
in connection with this Agreement shall be deemed Confidential Information of
Spider disclosed by Spider to Intek and exceptions (i) and (iv) above shall not
be applicable thereto.
14.2 Notice of Breach. The Receiving Party will notify the Disclosing
Party in writing immediately upon the occurrence of any unauthorized release or
other breach of which it is aware under Section 14.1
15. Maintenance, Support, and Hosting Services.
15.1 Maintenance, Support, and Technical Services to Intek. Spider shall
provide the following maintenance and support, technical support, installation
and training services to Intek:
(i) Maintenance and Support Services. For three (3) years
following the Effective Date, Spider shall provide maintenance and support
services for the Software and the Developed Software to Intek. The parties
shall mutually agree within sixty (60) days of the Effective Date upon a
reasonable fee to be charged by Spider and paid by Intek for such
maintenance and support services, which fee shall fully compensate Spider
for all maintenance and support services provided to Intek after the
Effective Date in excess of the quantity and types of services historically
provided by Spider to Intek prior to the Effective Date and for "customer
use" of the Software and Developed Software. Such maintenance and support
services shall comprise "Maintenance and Support Services", as such
capitalized term is defined in Attachment D to this Agreement, until such
time as Spider has implemented standard maintenance and support terms and
conditions under which Spider will provide maintenance and support services
to third parties (the "Standard Ts & Cs"), at which time, the Standard Ts &
Cs (excluding payment terms) shall supersede those set forth on Attachment
D. Following the expiration of the three-year period during which Spider
shall provide maintenance and support services to Intek for the fee
specified in this Section 15.1(i), Spider will provide such Maintenance and
Support Services to Intek, at Intek's request, and such Maintenance and
Support Services shall be at Spider's then-current rates for time and
materials or such flat fee charges as Spider then generally offers to its
own customers, as Intek may elect.
(ii) Technical Services. For three (3) years from the Effective
Date, Spider shall provide to Intek Technical Support Services, as such
capitalized term is defined in Attachment D. Intek shall compensate Spider
for providing the Technical Support Services in the amount of Spider's
fully burdened employee costs and expenses (including salary, wages,
benefits, employer taxes, all other direct employee expenses) for providing
such services, plus a margin of twenty percent (20%) thereon, or on a basis
the parties may
21
otherwise agree. Spider's employee costs and expenses shall not include any
overhead or indirect management charges. Following the expiration of the
three-year period during which Spider shall provide Technical Support
Services to Intek at such rate, Spider may elect to provide Technical
Support Services to Intek, at Intek's request, and such Technical Support
Services shall be at Spider's then-current rates for time and materials.
(iii) Modifications. The parties acknowledge that the scope of
Maintenance and Support Services provided by Spider and paid for by Intek
may require adjustment after the Effective Date. Accordingly, during the
initial sixty (60) day period after the Effective Date, the parties will
negotiate in good faith such modifications to Attachment D, if any, that
are necessary and appropriate to provide Intek with such additional
services that it is determined are required and/or to provide Spider with
additional compensation that it is determined is required.
15.2 Hosting Services. For two (2) years from the Effective Date, at
Intek's request, Spider shall provide hosting services with respect to servers
that are owned by existing or future customers of Intek on which the Software or
Developed Software has been installed and is operated for the benefit of such
customers. Such hosting services shall consist of all services reasonably
necessary to ensure that the Software operates properly on such servers. As a
part of providing the hosting services, Spider shall, in addition, maintain all
notices on the applicable computer hardware that indicate that such hardware is
owned by the applicable Intek customers. Intek shall compensate Spider for
providing such hosting services to Intek's customers by passing through to
Spider all amounts received by Intek from the applicable existing customers as
compensation for operating such customers' servers or, in the case of future
Intek customers, the out-of-pocket costs incurred by Spider in operating the
server(s) for such customers. Following the expiration of the two-year period
during which Spider shall provide hosting services to Intek customers for such
amounts as Intek receives as compensation for operating such customers' servers,
Spider may elect to provide the hosting services to Intek customers, and such
hosting services shall be at Spider's then-current rates for time and materials
or such flat fee charges as Spider then generally offers to its own customers.
15.3 Maintenance and Support Services to Intek Customers. Following the
Effective Date, Spider shall assume the maintenance and support obligations
under the existing agreements between Intek and its customers that are listed on
Attachment E to this Agreement. Intek shall compensate Spider for assuming such
maintenance and support obligations by passing through to Spider 95% of all
amounts received by Intek from the applicable customers as compensation for the
applicable maintenance and support services. Spider may assume additional
maintenance and support obligations to Intek customers, for such fees that are
mutually agreed between the parties and set forth in a written amendment to this
Agreement. Spider shall provide maintenance and support services to future Intek
customers or sublicensees pursuant to the Standard Ts & Cs, if such customer or
sublicensee has licensed the Software or Developed Software from Spider or
sublicensed the Software or Developed Software from Intek pursuant to this
Agreement.
15.4 Source Code Escrow. Spider will place into escrow with an escrow
agent reasonably acceptable to both parties, pursuant to an escrow agreement
with such escrow agent which is supplemental to this Agreement, the source code
of the Software, together with the Accompanying
22
Documentation, as it exists on the Effective Date (the "Deposit), and Spider
will update the Deposit with new releases, versions and successor products of
the Software (including, without limitation, the Developed Software) and
Developer's Notes promptly as they become available. At the request of Intek
from time to time, such escrow will include verification services provided by
the escrow agent which are mutually agreed between Spider and Intek which
agreement will not be unreasonably denied by Spider, and set forth in the escrow
agreement. All escrow maintenance fees and the full cost of verification
services (including reimbursement of Spider's costs and expenses) shall be borne
by Intek, but Spider shall be responsible for fees associated with establishing
the escrow account. Intek shall be entitled to release of the Deposit from
escrow (i) to the extent that such release is permitted under applicable law if
Spider seeks protection under the United States Bankruptcy Code or similar
protection from creditors or bankruptcy receivership, insolvency,
reorganization, dissolution, liquidation or other similar proceedings are
instituted (a) by it, (b) by or against Spider and not dismissed within sixty
(60) days; or (ii) in the event that there is an Abandonment of the Software or
the Developed Software within the meaning of Section 3.7 above that triggers
Intek's right to exercise the licenses granted to Intek under Sections 3.2(ii)
or 3.4(ii) of this Agreement.
15.5 Term of Support of Software and Developed Software. Spider shall
provide Maintenance and Support Services described herein for each new version
or new release of the particular Software or Developed Software three (3) years
after the public release thereof.
16. Events of Default.
16.1 By Intek. Spider shall have the right to terminate the Software
License, the Proprietary Rights License, and the Developed Software License and
seek recovery of damages from Intek (i) upon written notice in the event that
Intek willfully or recklessly, with the approval or prior actual knowledge of
senior management of Intek (including, without limitation, directors and senior
officers of Intek), breaches its obligations under Sections 4 and/or 14 above,
if Intek fails to initiate action to cure such breach within ten (10) days
following Intek's receipt of such notice and fails to cure such breach within
fifteen (15) days following receipt of such notice, (ii) upon written notice in
the event that Intek negligently, with the approval or prior actual knowledge of
senior management of Intek (including, without limitation, directors and senior
officers of Intek), breaches its obligations under Sections 4 and/or 14 above,
if Intek fails to initiate action to cure such breach within ten (10) days
following Intek's receipt of such notice and fails to cure such breach within
twenty-five (25) days following receipt of such notice, or (iii) upon sixty (60)
days' prior written notice, in the case of Intek's material breach of any
provision of this Agreement if Intek fails to cure such breach within such sixty
(60)-day period.
16.2 By Spider. Intek shall have the right to foreclose on its security
interest in the Proprietary Rights in and to the Software and/or terminate this
Agreement and/or seek recovery of damages from Spider (i) upon ten (10) days
prior written notice in the event that Spider willfully, recklessly, or
negligently with the approval or prior actual knowledge of senior management of
Spider (including, without limitation, directors and senior officers of Spider)
breaches its obligations under Section 14 above, if Spider fails to cure such
breach within such ten (10) day period, or (ii) upon sixty (60) days' prior
written notice, in the case of Spider's material breach of any other provision
of this Agreement, with the exception of Section 15, if Spider fails to cure
such breach within such sixty (60)-day period. If Spider materially breaches its
obligations under Section 15 of
23
this Agreement and such breach remains uncured for sixty (60) days following
Spider's receipt of written notice describing the breach, Intek shall have the
right to contract with a third party to obtain such maintenance, training,
support, technical and hosting services and seek recovery of damages from
Spider, and/or terminate this Agreement.
16.3 Termination for Convenience. Intek may terminate this Agreement for
convenience upon ninety (90) days' prior written notice. Termination under this
Section 16.3 shall not terminate the provisions of Section 1.1, 2, 9, 10, 11,
12, 13, 14, 17 or 20, or other provisions which by their sense should survive
such termination.
16.4 Effect of Termination. Termination of all or part of this Agreement
does not terminate any license or sublicense granted hereunder to a customer of
Intek or the maintenance and support obligations of Spider to such customer,
provided, however, that upon termination hereof Spider may directly collect all
licensing, sublicensing, support and maintenance fees directly from the customer
if such customer was remitting such fees to Intek.
17. Dispute Resolution.
17.1 Arbitration. Except for disputes to be settled as provided under
Section 17.2 below, none of which shall be subject to this Section 17.1, all
disputes arising under this Agreement shall be settled by arbitration. The
arbitration shall be conducted under the then-current Commercial Arbitration
Rules of the AAA, with the substantive law to be applied to be determined under
Section 20.7 below and the venue of the arbitration to be in Denver, Colorado.
Each party shall select one (1) arbitrator, and a third arbitrator shall be
chosen by the two arbitrators chosen by the parties. If the two arbitrators
cannot agree on the third arbitrator, the third arbitrator shall, within thirty
(30) days of submission of a request by the two arbitrators chosen by the
parties, be chosen by the AAA from a panel of arbitrators knowledgeable and
experienced in the fields of computer technology and software licensing. The
arbitrators shall decide the dispute within thirty (30) days of the conclusion
of the parties' presentation of the dispute. The arbitrators are not empowered
to award damages in excess of those permitted herein. The written determination
of the arbitrators shall be final and shall not be subject to judicial review;
provided, however, that any award of determination rendered by the arbitrator(s)
may be entered in a court of competent jurisdiction. The prevailing party shall
be entitled to recover the costs of arbitration and attorneys' fees and
expenses, which shall be made part of the arbitrators' award. The arbitrators
shall determine the prevailing party for this purpose.
17.2 Expedited Arbitration. All disputes arising under Sections 3.6, 3.7,
3.8, 3.9, 6.3, 6.4, 8.3 or 15.4 and disputes with respect to the selection of a
valuation expert under Section 8.2 shall be resolved using the AAA's fast track
arbitration procedures by a single arbitrator chosen by the parties from a list
of five persons experienced in the fields of computer technology and software
licensing selected by the AAA. Each party shall have the right to strike two (2)
names from the list. The arbitrator is not empowered to award damages in excess
of those permitted herein. The written determination of the arbitrator shall be
final and shall not be subject to judicial review; provided, however, that any
award or determination rendered by the arbitrator may be entered in a court of
competent jurisdiction. The prevailing party shall be entitled to recover the
costs of arbitration and attorneys' fees and expenses, which shall be made part
of the arbitrator's award. The arbitrator shall determine the prevailing party
for this purpose.
24
17.3 Equitable Relief. Nothing in this Section 17 shall preclude either
party from seeking equitable relief from a court of competent jurisdiction in
order to maintain the status quo pending the outcome of arbitration.
18. Relationship of the Parties. Notwithstanding any provision hereof, for all
purposes of this Agreement, each party shall be and act as an independent
contractor and not as a partner, joint venturer or agent of the other and shall
not bind or attempt to bind the other to any contract.
19. Affiliates. For the purposes of this Agreement, references to Intek shall
be deemed to include, collectively, Intek and each Intek Affiliate that has
agreed to be bound by all of the terms and conditions of this Agreement in a
written amendment to this Agreement signed by such Intek Affiliate. Likewise,
all references to Spider shall be deemed to include, collectively, Spider and
each Spider Affiliate that has agreed to be bound by all of the terms and
conditions of this Agreement in a written amendment to this Agreement signed by
such Spider Affiliate. Notwithstanding any provision to the contrary contained
in this Agreement, neither party shall enter into any transaction with any
Affiliate that would circumvent its monetary or other obligations under this
Agreement. For purposes of this Agreement, "Affiliate" shall mean any entity
controlled by, controlling, or under common control with, a party, where
"control" means the ownership or control, directly or indirectly, of fifty
percent (50%) or more of all of the voting powers of the shares (or other
securities or rights) entitled to vote for the election of directors or other
governing authority or otherwise having power to control such entity's general
activities, but only for so long as such ownership or control shall continue.
20. Miscellaneous.
20.1 Entire Agreement. This Agreement and the other writings referred to
herein or delivered pursuant hereto which form a part hereof contain the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior and contemporaneous arrangements or understandings with
respect thereto.
20.2 Waiver and Modification. An extension, amendment, modification,
cancellation by mutual agreement, or termination by mutual agreement of this
Agreement will be valid and effective only if it is in writing and signed by
each party to this Agreement. In addition, a waiver of any duty, obligation, or
responsibility of a party under this Agreement will be valid and effective only
if it is evidenced by a writing signed by, or on behalf of, a party against whom
the waiver is sought to be enforced. The waiver by either party of a breach of a
provision of this Agreement will not constitute a waiver of a succeeding breach
of the provision or a waiver of the provision itself.
20.3 Notices. All notices, requests, consents and other communications
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person or sent by telecopy, nationally
recognized overnight courier, or first class registered or certified mail,
return receipt requested, postage prepaid, addressed to such party at the
address set forth below or in a counterpart hereto (as the case may be) or such
other address as may hereafter be designated in writing by such party to the
other parties:
25
If to Spider, to:
Spider Technologies, Inc.
0000 XXX Xxxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000-0000
Phone: 000-000-0000
Telecopy: 000-000-0000
Attention: Chief Executive Officer
with a copy to:
E* Law Group
0000 Xxxx 000xx Xxxxx
Xxxxxxxxxxx, XX 00000
Phone: 000-000-0000
Telecopy: 000-000-0000
Attention: Xxxxxx Makarachian
If to Intek, to:
Intek Information, Inc.
0000 XXX Xxxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Chief Executive Officer
with a copy to:
Xxxxxxxx, Xxxxx & Xxxxxxx, P.C.
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: G. Xxxxx Xxxxxxxx, Jr.
All such notices, requests, consents, and other communications shall be deemed
to have been given when received or delivery refused and, in the case of any
notice delivered by mail, three (3) days after deposited in the U.S. mails
unless received sooner.
20.4 Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement. Facsimile copies shall be deemed originals.
20.5 Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be a part
of this Agreement.
20.6 Nouns and Pronouns. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine, or neuter
forms, and the singular form of names and pronouns shall include the plural and
vice versa.
26
20.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado, without giving effect to the
principles of conflicts of law. Each of the parties hereto hereby irrevocably
and unconditionally consents to submit to the jurisdiction of the courts of the
State of Colorado and of the United States, in each case located in the County
of Denver, for any action, proceeding, or investigation in any court or before
any governmental authority ("Litigation") arising out of or relating to this
Agreement and the transactions contemplated hereby (and agrees not to commence
any Litigation relating thereto except in such courts). Each of the parties
hereto hereby irrevocably and unconditionally waives any objection to the laying
of venue of any Litigation arising out of this Agreement or the transactions
contemplated hereby in the courts of the State of Colorado or the United States
of America, in each case located in the County of Denver, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such Litigation brought in any such court has been brought
in an inconvenient forum.
20.8 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid, but if any
provision of this Agreement is held to be invalid or unenforceable in any
respect, such invalidity or unenforceability shall not render invalid or
unenforceable any other provision of this Agreement.
20.9 Rights of Third Parties. Nothing in this Agreement, whether express
or implied, is intended or should be construed to confer or grant to any person,
except Spider and Intek, and their respective assignees and successors, any
claim, right, remedy, or privilege under, or because of, this Agreement or any
provision of this Agreement.
20.10 Assignment; Binding Effect. A party to this Agreement (whether by
operation of law or otherwise) shall not assign its rights or delegate its
duties, obligations, and responsibilities under this Agreement without the
advance written consent of the other party to this Agreement, and any assignment
or delegation without the advance written consent of the other party will be
invalid and ineffective against the nonconsenting party. Such consent will not
be unreasonably withheld. This Agreement is binding on, and inures to the
benefit of, any successor or approved assignee of a party to this Agreement. A
sale of the capital stock of a party or a merger of a party shall not be deemed
to constitute an assignment.
20.11 Standard Terms and Conditions. Whenever reference is made herein to
Spider's "standard agreements", "standard terms", "Standard Ts & Cs", "standard
pricing", or similar concepts, the standard provisions used by Spider with
similarly situated customers shall apply, and if there are no such standard
agreements, terms, conditions, or pricing, and other data regarding transactions
of Spider is not available to arrive at an appropriate agreement, term,
condition or price based upon other transactions, the then-current standard
industry agreements, terms, conditions, or pricing, shall be used.
20.12 Survival of Terms. Provisions which by their sense should survive
termination hereof, including the payment, confidentiality and indemnification
provisions hereof, shall survive termination.
27
20.13 Specific Performance. Each party acknowledges and agrees that, due
to the unique nature of the Disclosing Party's Confidential Information and
other aspects of this Agreement, there can be no adequate remedy at law for any
breach of its obligations under certain provisions hereof, that any such breach
may allow the party or third parties to unfairly compete with the other party,
or otherwise result in irreparable harm to the party, and, therefore, that upon
any such breach or threat thereof, (i) under Section 14.1 the Disclosing Party
shall be entitled to injunctive relief and other appropriate equitable relief,
and to be indemnified by the Receiving Party from any loss or harm (including,
without limitation, for attorneys' fees) in connection with any breach or
enforcement of the Receiving Party's obligations thereunder or the unauthorized
use or release of any Confidential Information; and (ii) Intek shall be entitled
to injunctive relief and other appropriate equitable relief for enforcement of
Sections 8.1, 8.2, 8.3, and 8.4; in each case without the necessity of posting
any bond, in addition to whatever remedies the party may have under this
Agreement and at law. The listing of any particular Section in this Section does
not, by implication or otherwise, mean injunctive and other equitable relief may
not be appropriate in respect of other provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Software Assignment and Grant-Back License, Maintenance, and Support
Agreement as of the Effective Date.
INTEK INFORMATION, INC.
By: /s/ Xxxxxxx X. X'Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. X'Xxxxxxx
------------------------------------
Its: Chief Executive Officer
-------------------------------------
SPIDER TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. X'Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. X'Xxxxxxx
------------------------------------
Its: Appointed Signatory
-------------------------------------
28
ATTACHMENT A
Software Description
Modules & Sections
_______________________________________________________________
Application Manager
Event Manager
Exchange Manager
Program Manager
Process Manager
Reporting Manager
Order Inventory
Scripting & Data Capture
Application Manager (AM)
-------------------------
. Installation Manager
. Configuration Manager
. User Manager
. Users & Groups
. Message Manager
. User Interface
. Screen Manager
. Screens & Menues
. Security
Event Manager (EM)
-------------------
. Event Types
. Queues
. Scheduler
Exchange & Process Manager (XM)
--------------------------------
. Data Import and Export
. EDI
Program Manager (PM)
--------------------
. Customers & Prospects
. Programs & Projects
. Events & Event Logging
Reporting Manager (RM)
------------------------
. Reporting Library
. Scheduling
. Distribution
29
Order Inventory (OI)
--------------------
. Orders
. Order Entry (OE)
. Shipping (SH)
. Taxation (TX)
. Payment (PA)
Authorization
Settlement
. Inventory (IN)
. Invoicing (IV)
. Products & Suppliers
. Products (PR)
Suppliers
Shipping
Pricing
Scripting & Data Capture (SD)
-----------------------------
. Scripting Engine
. Script building tool
. Script validation and verification
30
ATTACHMENT B
Customized Software
[To be provided by Intek within sixty (60) days
following the Effective Date and attached to this Agreement]
Existing Licenses
[List of Intek call counter customers and
references to corresponding agreements to be provided
by Intek within sixty (60) days following the
Effective Date and attached to this Agreement]
31
ATTACHMENT C
Third Party Components of the Software
--------------------------------------------------------------------------------
Software Version Vendor
-------- ------- ------
--------------------------------------------------------------------------------
Sybase 11.0.3 Sybase
--------------------------------------------------------------------------------
11.5.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Windows 95 4.00.95OB Microsoft
--------------------------------------------------------------------------------
Windows 98 Microsoft
--------------------------------------------------------------------------------
Windows NT 4.00.1381 Microsoft
--------------------------------------------------------------------------------
Sun Solaris Unix Sun
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Netscape Suitespot Netscape
--------------------------------------------------------------------------------
ICVERIFY 2.1, 2.2, 1.2 Cybercash
--------------------------------------------------------------------------------
ICVERIFY DLL 6.61, 6.62, 6.63 Cybercash
--------------------------------------------------------------------------------
Taxware 2.1, 3.0 Taxware
--------------------------------------------------------------------------------
Verazip 1 Taxware
--------------------------------------------------------------------------------
Cold Fusion Server 3.00.00 Xxxxxxx
--------------------------------------------------------------------------------
Crystal Info 6 Seagate
--------------------------------------------------------------------------------
Cold Fusion Scheduler Xxxxxxx
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Reflections 5.2 WRQ
--------------------------------------------------------------------------------
McAfee Viruscan 3.1.8 Network Assio.
--------------------------------------------------------------------------------
Trading Partner PC/32 5.00.17 Mercator
--------------------------------------------------------------------------------
Visual Basic 6 Microsoft
--------------------------------------------------------------------------------
Batch Job Server 2.1 Camellia Software
--------------------------------------------------------------------------------
Crystal Reports 6 Seagate
--------------------------------------------------------------------------------
Data Junction 6 Datajunction
--------------------------------------------------------------------------------
Excel 97 Microsoft
--------------------------------------------------------------------------------
Access 97 Microsoft
--------------------------------------------------------------------------------
Mercator 1.3e Mercator
--------------------------------------------------------------------------------
SpecBuilder 3.2 Edifecs Commerce
--------------------------------------------------------------------------------
Visual Foxpro 6 Microsoft
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MKS Tools 5.1 MKS Inc.
--------------------------------------------------------------------------------
XXXxx 2.6, 3.00, 3.5 Platium
--------------------------------------------------------------------------------
Cold Fusion Studio 3.1 Xxxxxxx
--------------------------------------------------------------------------------
Homesite 2.5.3 Xxxxxxx
--------------------------------------------------------------------------------
Netscape Communicator 4.45 Netscape
--------------------------------------------------------------------------------
4.5
--------------------------------------------------------------------------------
SQL Advantage 11.5 Sybase
--------------------------------------------------------------------------------
WinZip 6.3 Shareware
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Software Version Vendor
-------- ------- ------
--------------------------------------------------------------------------------
Dynacomm 7 Futuresoft
--------------------------------------------------------------------------------
7.02
--------------------------------------------------------------------------------
Internet Explorer 3.01 Microsoft
--------------------------------------------------------------------------------
4
--------------------------------------------------------------------------------
Visual SourceSafe 5 Microsoft
--------------------------------------------------------------------------------
Visio Professional 5 Visio Corporation
--------------------------------------------------------------------------------
Project 97 Microsoft
--------------------------------------------------------------------------------
Word 97 Microsoft
--------------------------------------------------------------------------------
Visual Cafe Semantic
--------------------------------------------------------------------------------
Fax Sr Omtool
--------------------------------------------------------------------------------
Hummingbird Hummingbird
--------------------------------------------------------------------------------
Screen Surfer 1.3.25d Intelligent Env.
--------------------------------------------------------------------------------
Photoshop 4 Adobe
--------------------------------------------------------------------------------
QuarkXpress 3.3 Adobe
--------------------------------------------------------------------------------
Adobe Acrobat 3 Adobe
--------------------------------------------------------------------------------
Illustrator 8 Adobe
--------------------------------------------------------------------------------
Gifmation 1 Boxtop Software
--------------------------------------------------------------------------------
Ray Xxxxxx Xxxxxx 5 Fractual Design
--------------------------------------------------------------------------------
RoboHelp 1 Bluesky
--------------------------------------------------------------------------------
BrowserSizer ? Freeware
--------------------------------------------------------------------------------
MacroMagic ? Iolo Tech.
--------------------------------------------------------------------------------
WinRar ? Freeware
--------------------------------------------------------------------------------
Jwrite ? MWK Software
--------------------------------------------------------------------------------
Compaq Insight Manager 3-4.? Compaq
--------------------------------------------------------------------------------
MS Solution Provider Microsoft
--------------------------------------------------------------------------------
33
ATTACHMENT D
Maintenance and Support Services:
Software and Developed Software
Technical Support Services
1. DEFINITIONS
1.1 "Email Support" means that Spider provides an e-mail address to which
Intek may address messages containing questions relating to the
Software and/or the Developed Software and that Spider's Support
Personnel shall respond to such messages in a timely fashion.
1.2 "Error" means an error in the Software and/or Developed Software that
degrades the functionality of the Software and/or Developed Software
as set forth in the applicable documentation.
1.3 "Fix" means the repair or replacement of code of the Software or the
Developed Software to remedy an Error.
1.4 "Maintenance and Support Services" means the maintenance and support
services described in Section 2 of this Attachment D.
1.5 "Priority A Error" means an Error that (i) renders the Software and/or
Developed Software inoperative or intermittently operative; (ii)
substantially degrades performance; (iii) causes any feature to be
unavailable or substantially impaired; or (iv) causes a complete
failure of the Software and/or Developed Software.
1.6 "Priority B Error" means an Error that degrades the performance of the
Software and/or Developed Software or restricts Intek's use of the
Software and/or Developed Software.
1.7 "Priority C Error" means an Error that has only a minor impact on
Intek's use of Software and/or Developed Software.
1.8 "Support Personnel" means the employees designated by each party to
communicate with the other party with respect to the maintenance and
support services to be provided under this Attachment D.
1.9 "Technical Support Services" means the Technical Support Services
described in Section 3 of this Attachment D.
1.10 "Telephone Support" means technical support assistance provided by
telephone to Intek's Support Personnel by Spider during normal
business hours and the means for
34
such Support Personnel to leave telephone voice messages during
periods other than normal business hours.
1.11 "Workaround" means a change in the procedures followed or data
supplied by Intek to avoid an Error without substantially impairing
Intek's use of Software.
All capitalized terms not defined in this Attachment D shall have the
meanings given to such terms in the body of the Software Assignment and
Grant-Back License, Maintenance, and Support Agreement ("Agreement") of
which this Attachment D is part.
2. MAINTENANCE AND SUPPORT SERVICES
Maintenance and Support Services consist of Fixes, Email Support and
Telephone Support provided to Intek concerning Errors and the installation,
maintenance, modification, support and use by Intek of the Software and
Developed Software. Spider shall exercise commercially reasonable efforts
to correct any Error reported by Intek's Support Personnel in the Software
and/or Developed Software in accordance with the priority level assigned to
such Error by Intek's Support Personnel.
a. In the event of any Priority A Errors, Spider shall promptly commence
the following procedures:
i. assign senior engineers to correct the Error;
ii. notify Spider's management that such Errors have been reported
and of steps being taken to correct such Error(s);
iii. provide Intek with periodic reports on the status of the
corrections; and
iv. initiate work and vigorously continue such work around-the-clock
until a Workaround or Fix is provided to Intek.
b. In the event of any Priority B Errors, Spider shall exercise
commercially reasonable efforts to provide Intek with the Fix for the
Error within ten (10) business days of the date on which Intek's
Support Personnel first reported such Error.
c. In the event of any Priority C Errors, Spider may include the Fix for
the Error within thirty (30) business days of the date on which
Intek's Support Personnel first reported such Error.
3. TECHNICAL SUPPORT SERVICES
Technical Support Services consist of Email Support and Telephone Support
provided to Intek concerning any problems that may arise with respect to
the computer hardware and software and telecommunications systems that
Intek uses to provide the Operational Services or for accounting functions,
other than those to be resolved through Spider's provision of the
Maintenance and Support Services set forth in Section 2 of this Attachment
D.
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4. ON-SITE VISITS
Technical Support Services and Maintenance Support Services may include on-
site visits by Spider Support Personnel to resolve the applicable problems
or provide the applicable services, provided that Intek pays all travels
costs and expenses associated with such visits if such visit is requested
by Intek, in addition to the fees for Technical Support Services and
Maintenance Support Services set forth in the Agreement. If an on-site
visit is made at Intek's request and the Spider personnel are also engaging
in other activities on that trip for the benefit of Spider or Spider
customers, the costs paid by Intek will be reduced so Intek pays only its
proportional amount of such costs.
5. INSTALLATION AND TRAINING SERVICES
Spider shall provide Telephone Support and Email Support to Intek personnel
qualified to install the Software and the Developed Software in accordance
with general industry standards and, if applicable, in the same manner in
which Spider provides installation support to licensees of the Developed
Software. Spider shall provide training to Intek personnel competent to
understand and apply such training via telephone and electronic mail in
accordance with general industry standards and, if applicable, in the same
manner in which Spider provides training to similarly-trained personnel of
licensees of the Developed Software.
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ATTACHMENT E
Maintenance and Support Obligations to Intek Customers
to be Assumed by Spider
[List of Customer Contacts to be provided
by Intek within sixty 60 days following the
Effective Date and attached to this Agreement]
37
ATTACHMENT F
MEMORANDUM OF COPYRIGHT ASSIGNMENT
INTEK INFORMATION, INC., a Delaware corporation ("Assignor"), for good and
valuable consideration, the receipt of which is acknowledged, HEREBY ASSIGNS to
SPIDER TECHNOLOGIES, INC., a Delaware corporation ("Assignee"), all right, title
and interest in and to the software known as "Telweb" and further described in
Exhibit A hereto, any and all copyrights therein worldwide, including without
limitation U.S. Copyright Registration No. TX4-935-066 (Telweb v. 2.0) and U.S.
Copyright Registration No. TX4-946-000 (Telweb v. 2.0a), any renewals and
extensions of any copyrights, and all causes of action heretofore accrued for
infringement of any copyrights.
THIS INSTRUMENT is a memorandum for recording of an assignment more fully
set forth in that certain "Software Assignment and Grant-Back License,
Maintenance and Support Agreement" dated October ___, 1999 between Assignor and
Assignee.
Date:_____________________________ INTEK INFORMATION, INC.
By: ______________________________
Name: ______________________________
Title: ______________________________
38
EXHIBIT A
TO MEMORANDUM OF COPYRIGHT ASSIGNMENT
Software Description
Modules & Sections
--------------------------------------------------------------------------------
Application Manager Order Inventory (OI)
--------------------
Event Manager . Orders
Exchange Manager . Order Entry (OE)
Program Manager . Shipping (SH)
Process Manager . Taxation (TX)
Reporting Manager . Payment (PA)
Order Inventory Authorization
Scripting & Data Capture Settlement
. Inventory (IN)
. Invoicing (IV)
Application Manager (AM) . Products & Suppliers
------------------------
. Installation Manager . Products (PR)
. Configuration Manager Suppliers
. User Manager Shipping
. Users & Groups Pricing
. Message Manager
. User Interface Scripting & Data Capture (SD)
-----------------------------
. Screen Manager . Scripting Engine
. Screens & Menues . Script building tool
. Security . Script validation and verification
Event Manager (EM)
------------------
. Event Types
. Queues
. Scheduler
Exchange & Process Manager (XM)
-------------------------------
. Data Import and Export
. EDI
Program Manager (PM)
--------------------
. Customers & Prospects
. Programs & Projects
. Events & Event Logging
Reporting Manager (RM)
----------------------
. Reporting Library
. Scheduling
. Distribution
39
