EXHIBIT 10-21
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SOFTWARE DEVELOPMENT AND OEM AGREEMENT
THIS SOFTWARE DEVELOPMENT AND OEM AGREEMENT (this "AGREEMENT") is
entered into as of December 28, 1999 (the "EFFECTIVE DATE"), by and between
MICROSTRATEGY INCORPORATED, a Delaware corporation ("MICROSTRATEGY") and
EXCHANGE APPLICATIONS, INC., a Delaware corporation ("EA").
RECITALS
1. EA has developed certain proprietary customer relations management
("CRM") software, including, without limitation, VALEX(TM) and eXstatic(TM), all
as described in greater detail hereiN.
2. MicroStrategy desires to develop certain industry-specific data
models for a set of vertical industries, as described in greater detail herein,
and certain CRM applications which will function in connection with such data
models and with the EA Products (as defined below).
3. EA desires to integrate the MicroStrategy Software (as defined
herein) with the data models and CRM applications and/or with the EA Products
(as defined herein) and to sublicense such Exchange Applications Solutions
directly to end users.
4. EA and MicroStrategy believe that it is in their respective best
interests that the foregoing data models, CRM applications, development
environments and certain other developed software (collectively, the "DEVELOPED
PRODUCTS", as defined and described in greater detail in Section 1), be
developed.
5. To achieve the development of the Developed Products, EA and
MicroStrategy have agreed to engage in certain joint development work and to
grant certain technology licenses as set forth in this Agreement.
6. To facilitate the development of the Developed Products and
integration of the Developed Products with the EA Products and the MicroStrategy
Software, MicroStrategy has agreed to create a business unit dedicated to the
development and maintenance of the foregoing.
7. EA and MicroStrategy have also agreed on the basis on which they
will engage in certain joint marketing efforts to achieve commercial success for
the Developed Products.
ACCORDINGLY, EA and MicroStrategy agree as follows:
AGREEMENT
1. DEFINITIONS. In addition to those terms that are defined where first used,
the following definitions shall apply:
"APPLICATIONS" means the CRM applications developed by MicroStrategy
pursuant to this Agreement, which will consist of a set of analytic CRM
functionalities for certain horizontal and/or vertical industries as applied to
the Data Models. The Applications may include, without
limitation, customer and segment analysis, sales and channel analysis, campaign
and offer analysis and market basket analysis.
"CONFIDENTIAL INFORMATION" means any confidential or proprietary
information, including without limitation any source code, software tools,
designs, schematics, plans or any other information relating to any research
project, work in process, future development, scientific, engineering,
manufacturing, marketing or business plan, or financial or personnel matter
relating to either party, its present or future products, sales, suppliers,
customers, employees, investors or business, identified by the disclosing party
as Confidential Information, whether in oral form, or in written, graphic or
electronic form and marked as confidential or disclosed under circumstances that
would lead a reasonable person to conclude that the information was
confidential, including without limitation, the source code related to the EA
Products, the MicroStrategy Software and the Developed Products.
"DATA MODELS" means the industry-specific models for the storage of
information developed by MicroStrategy pursuant to this Agreement, which may
include, without limitation, the following vertical industries: banking, mutual
fund and brokerage, telecommunications, transportation, automotive, retail
catalogue, business-to-business high technology and business-to-consumer
Internet.
"DERIVATIVE WORK" means a work which is based on the Developed
Products, such as a revision, enhancement, modification, translation,
abridgement, condensation, expansion, or any other form in which the Developed
Products may be recast, transformed, or adapted, and which, if prepared without
authorization of the owner of the copyright in such product, would constitute a
copyright infringement. For purposes hereof, Derivative Work shall also include
any compilation that incorporates a Developed Product.
"DEVELOPED PRODUCTS" means, collectively, the Data Models, Applications
and certain other developed software developed pursuant to the Work Plan (as
defined in Section 2.1(a)) as such Work Plan may be amended and/or modified from
time to time pursuant to the terms of the Work Plan.
"EA KNOW-HOW" means the techniques, inventions, practices, methods,
knowledge, designs, skill and experience relating to the EA Products that are to
be disclosed by EA to MicroStrategy pursuant to this Agreement and that are
proprietary to EA.
"EA PATENTS" means patents related to the EA Products, including
without limitation, all foreign counterparts, all substitutions, extensions,
reissues, renewals, divisions, continuations and continuations in part relating
to such patents and their foreign counterparts, and which are owned or
controlled by EA (where "CONTROLLED" means licensed by EA with a royalty-free
right to grant sublicenses).
"EA PRODUCTS" means EA's proprietary CRM and email software products
and other CRM products and CRM applications, currently existing or which may be
later developed by EA, including, without limitation, VALEX(TM) and eXstatic(TM)
and which may include third party licensed software products as an integrated
component thereof.
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"EA TECHNOLOGY" means (i) the inventions, designs, discoveries and
processes claimed in the EA Patents and (ii) the EA Know-How.
"EVALUATION" means an installation of an Exchange Applications Solution
(as defined herein) for a period of sixty (60) days or less under the terms and
conditions specified herein during which an end user may evaluate the Exchange
Applications Solution for its internal use.
"IMPROVEMENTS" means any improvements, discoveries, developments,
modifications or derivative works, whether or not patentable.
"INTELLECTUAL PROPERTY RIGHTS" means all current and future trade
secrets, copyrights, patents and other patent rights, trademark rights, service
xxxx rights, mask work rights and any and all other intellectual property or
proprietary rights now known or hereafter recognized in any jurisdiction.
"MICROSTRATEGY KNOW-HOW" means the techniques, inventions, practices,
methods, knowledge, designs, skill and experience that are proprietary to
MicroStrategy and that were employed by MicroStrategy in the development of the
MicroStrategy Software or will be employed by MicroStrategy in the development
of the Developed Products, pursuant to this Agreement.
"MICROSTRATEGY PATENTS" means patents related to the MicroStrategy
Software, including without limitation, all foreign counterparts, all
substitutions, extensions, reissues, renewals, divisions, continuations and
continuations in part relating to such patents and their foreign counterparts,
and which are owned or controlled by MicroStrategy (where "CONTROLLED" means
licensed by MicroStrategy with a royalty-free right to grant sublicenses).
"MICROSTRATEGY SOFTWARE" means the entire MicroStrategy product suite
which is made generally available to end users during the term of this Agreement
and which is set forth in Exhibit A in the form in which such product suite
exists as of the Effective Date and as such may be amended by MicroStrategy from
time to time during the term hereof, subject to the requirements set forth in
Section 4.9(g)(ii).
"MICROSTRATEGY TECHNOLOGY" means (i) the inventions, designs,
discoveries and processes claimed in the MicroStrategy Patents and (ii) the
MicroStrategy Know-how.
"OPERATIVE AGREEMENTS" means, collectively, this Agreement, the Payment
and Registration Rights Agreement, the Joint Marketing Agreement, the License
Agreement and the Xxxxxxxx.xxx Master Affiliation Agreement.
"QUALIFIED EVENT" means the sale of all or a substantial part of a
party's assets or a stock sale where pre-event shareholders hold less than a
majority of the capital stock of the party after such event, whether by
acquisition, merger or otherwise.
"TERRITORY" means the World.
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"TESTING" means the testing of the G. A. version of the Developed
Products contemplated by Section 2.4 to ensure compatibility, in all material
respects, with the Specifications to be developed by the Steering Committee (as
defined in Section 2.1).
"USER DOCUMENTATION" means all instructional and technical materials
and related literature provided by MicroStrategy which is to be distributed to
end users in connection with the Developed Products and/or the MicroStrategy
Software.
"VAR AGREEMENT" means the value-added reseller agreement between the
parties that will exist upon conversion of this Agreement in accordance with the
provisions herein which shall be substantially in the form set forth in Exhibit
B hereto.
2. DEVELOPMENT OF DEVELOPED PRODUCTS; LICENSE FEE; VAR AGREEMENT SUPERSEDED.
2.1 DEVELOPMENT PROGRAM; CREATION OF BUSINESS UNIT AND STEERING COMMITTEE;
ONGOING OBLIGATIONS.
(a) Promptly following the execution of this Agreement, MicroStrategy
will create a business unit (the "BUSINESS UNIT"), which will include an
engineering team, dedicated to the development and maintenance, support,
integration and testing of the Developed Products pursuant to the terms of this
Agreement. The composition of the Business Unit, development overview and the
development objectives are set forth in Exhibit C, which shall be subject to
modification as set forth in the Work Plan. The parties will establish a
steering committee (the "STEERING COMMITTEE") promptly following the Effective
Date, which committee will be dedicated to setting the direction for development
of the Developed Products and the other development obligations of the Business
Unit as set forth in the Work Plan, including, without limitation, the
establishment of quarterly milestones ("Milestones"). The composition,
process-related responsibilities and operations of the Steering Committee are
set forth in Exhibit D (collectively, with Exhibit C, the "WORK PLAN").
MicroStrategy will allow EA complete access to the Business Unit at all times
during normal business hours, and all reasonable efforts shall be made by EA so
that such access does not interfere with the development responsibilities of the
Business Unit and/or the achievement of Milestones. EA will have the option, at
its discretion, to locate up to ten (10) members of its own engineering and
development team at the site established by MicroStrategy for the location of
the Business Unit, and MicroStrategy will provide EA with adequate space to
accommodate the foregoing. The Steering Committee shall develop the
specifications for the Developed Products (the "SPECIFICATIONS"). Upon
termination of the Business Unit duties by EA as provided in this Agreement or
upon termination of this Agreement for any reason, excluding material breach by
EA, MicroStrategy shall promptly deliver to EA the source code to all Developed
Products which have been completed and/or are in process as of the termination
date, product and design specifications, User Documentation, test data, and
other related information reasonably requested by EA (collectively, the
"DELIVERIES"). From time-to-time as the Developed Products are completed and
tested pursuant to Work Plan and/or upon the request of EA, MicroStrategy shall
make the Deliveries (or that portion thereof requested by EA) to EA.
(b) MicroStrategy shall maintain and support (by providing research and
development support and bug fixes to EA) the Developed Products and all software
licensed by
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MicroStategy hereunder during the term of this Agreement and any renewal periods
thereof as such software is actually used by the end user. The foregoing support
shall be provided in accordance, in all material respects, with MicroStrategy's
standard technical support procedures. In addition, MicroStrategy will provide
testing and quality engineering support for the Developed Products utilizing its
Quality Engineering and Beta Programs groups, which group will provide the
results of their tests to EA. MicroStrategy will designate a dedicated product
manager for the Developed Products, create demonstrations of the Applications
and develop pre-sales consulting materials for the Applications.
(c) Subject to the right of either party under Section 10 to terminate
this Agreement, the Business Unit will develop the Developed Products in
accordance with the Specifications in all material respects, and will perform
the tasks and furnish the deliverables described in the Work Plan, as such may
be modified pursuant to the procedures set forth therein. The parties shall meet
on a periodic basis in connection with the establishment of deliverables
pursuant to the Work Plan to identify with specificity and in writing the
Developed Products.
(d) The parties shall work in good faith to finalize the form of VAR
Agreement within thirty (30) days after the Effective Date.
2.2 LICENSE FEE.
(a) EA will pay MicroStrategy a license fee (the "LICENSE FEE") of
sixty five million dollars ($65,000,000) in cash and EA common stock in the
respective amounts and in accordance with the payment schedule set forth in the
Payment and Registration Rights Agreement by and between the parties dated as of
the Effective Date and attached hereto as Exhibit E (the "PAYMENT AND
REGISTRATION RIGHTS AGREEMENT"), in consideration of the rights, licenses and
obligations of the parties under this Agreement and the Exhibits hereto.
(b) Except as set forth in the foregoing paragraphs of this subsection
2.2 or as otherwise expressly provided in this Agreement, each party will bear
its own costs incurred by it to accomplish its responsibilities in the
development effort.
2.3 BUSINESS UNIT CHANGES. The parties' respective project managers shall
participate in project review meetings as mutually agreed. MicroStrategy may
change or substitute members of the Business Unit at its discretion from time to
time. Notwithstanding the foregoing, MicroStrategy shall adhere to the
then-current requirements of the Work Plan regarding the skill levels and other
qualifications of the Business Unit members.
2.4 CONFORMANCE TESTING. MicroStrategy will complete development and
delivery of the deliverable items set forth in the Work Plan in accordance with
the Milestones set forth therein. Upon completion of the Milestones, including,
without limitation, final completion of the Developed Products and the
performance of product quality and conformance testing of the G.A. version of
the Developed Products by MicroStrategy based upon testing criteria and
Specifications established by the Steering Committee, EA have the right to
confirm the results of such product quality and performance testing.
2.5 DEMONSTRATION ENVIRONMENT. MicroStrategy agrees to allocate a portion
of the Business Unit toward the development of a demonstration environment for
the Exchange
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Applications Solution and the Developed Products at EA's site. In connection
with the foregoing, MicroStrategy shall provide the MicroStrategy Software, the
Developed products and certain Business Unit personnel as selected by
MicroStrategy (collectively, the "MicroStrategy Resources"), and EA shall be
responsible for all third party software, all hardware and all costs related to
the demonstration environment, excluding those directly related to the
MicroStrategy Resources, or as otherwise specifically provided for in the Work
Plan.
2.6 TERMINATION OF VAR AGREEMENT. The parties acknowledge and agree that
this Agreement supersedes and replaces that DSS Partner Value-Added Reseller
Agreement between the parties dated June 1, 1999, which is hereby terminated
pursuant to Section 15.9 thereof. All licenses to end users granted under the
foregoing agreement will survive such termination, all obligations set forth in
Section 14.6 shall survive, and MicroStrategy's obligations under Section 9.2
thereof for support shall be pursuant to this Agreement in lieu of its support
obligations thereunder.
2.7 SOURCE CODE ESCROW. WITHIN TEN (10) DAYS AFTER the Effective Date, the
parties shall enter into a Source Code Escrow Addendum in respect of the
MicroStrategy Software in substantially the form provided to MicroStrategy's
other customers (the "SOURCE CODE ESCROW ADDENDUM").
3. JOINT MARKETING AND SALES; JOINT MARKETING AGREEMENT. The parties' respective
obligations regarding marketing and promotion of the Developed Products and
certain mutually agreed upon details regarding their relationship as embodied in
this Agreement shall be as set forth in a Joint Marketing Agreement in the form
attached hereto as Exhibit F.
4. JOINT OWNERSHIP OF DEVELOPED PRODUCTS; OEM LICENSE GRANTS TO MICROSTRATEGY
SOFTWARE.
4.1 JOINT OWNERSHIP; RESTRICTION ON SALE. MicroStrategy and EA shall
jointly own all right, title and interest worldwide in and to the Developed
Products including, without limitation, patents, copyrights, trade secrets and
any other Intellectual Property Rights (including trademarks and trade names
related to the Developed Products, but excluding any trademarks and trade names
owned individually by either party) incorporated in the Developed Products,
whether in the United States or abroad, which ownership rights shall be subject
to the restrictions set forth in Sections 4.7, 4.8 and elsewhere in this
Agreement. EA acknowledges that MicroStrategy has not filed any patent
applications nor obtained any issued patents on the Developed Products as of the
Effective Date. It is the intention of the parties that all the Intellectual
Property Rights (including any related trademarks and trade names, but excluding
those owned individually by either party) in the Developed Products shall be
jointly owned without any duty to account (except in the event of infringement
as provided in Section 4.12 or share any royalties (except as provided in
Section 11.1) based on the licensing or use of the Developed Products by the
other party. Notwithstanding the foregoing and except pursuant to Section 10.3,
during the period of time that the Business Unit obligations are continuing
hereunder and for a period of six (6) months thereafter (the "Lockup Period"),
neither party may sell, assign, transfer or encumber its ownership interest in
the Developed Products (a "Transfer of Ownership") without the other party's
prior written consent, which may be granted or withheld in such party's sole
discretion. After the Lockup Period, either party shall have the
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right to engage in a Transfer of Ownership, provided that such transfer shall
shall be a transfer of the transferring party's joint ownership interest in the
Developed Products only (subject to the restrictions set forth in this
Agreement), and shall not entail a transfer or assignment of any license or
other rights granted by MicroStrategy pursuant to this Agreement or of any
obligations of MicroStrategy hereunder.
4.2 ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS. Upon reasonable request,
each party (the "ASSISTING Party") will assist the other party (the "REQUESTING
PARTY") in every proper way to obtain and from time to time enforce, United
States and foreign Intellectual Property Rights related to the Developed
Products in any and all countries. To that end, the Assisting Party will
execute, verify and deliver such documents and perform such other acts
(including appearances as a witness) as the Requesting Party may reasonably
request for use in applying for, obtaining, perfecting, evidencing, sustaining
and enforcing such Intellectual Property Rights and the Requesting Party's joint
ownership interest therein. The Assisting Party's obligation to assist the
Requesting Party with respect to such Intellectual Property Rights relating to
the Developed Products in any and all countries shall continue for a period of
five (5) years after expiration or termination of this Agreement, which expenses
shall be shared by the parties as they may mutually agree. In addition, the
Assisting Party will execute any license agreement which is consistent with the
rights granted and the terms set forth in this Agreement requiring the names of
both co-owners to make the license granted therein enforceable.
4.3 EXECUTION OF DOCUMENTS. In the event the Requesting Party is unable for
any reason, after reasonable effort (which shall include the issuance of a final
notice pursuant to the notice provisions hereof), to secure the Assisting
Party's signature on any document needed in connection with the actions
specified in Section 4.2 above, the Assisting Party hereby irrevocably
designates and appoints the Requesting Party and its duly authorized officers
and agents as its agent and attorney in fact, which appointment is coupled with
an interest, to act for and in its behalf to execute, verify and file any such
documents and to do all other lawfully permitted acts to further the purposes of
the preceding paragraph with the same legal force and effect as if executed by
the Assisting Party.
4.4 COPYRIGHT NOTICES ON DEVELOPED PRODUCTS. EA and MicroStrategy agree
that all copies of the Developed Products and any Derivative Works, whether or
not modified, made by EA or MicroStrategy, or their respective licensees or
sublicensees, will contain applicable proprietary notices as described in
greater detail in Exhibit G. In addition, EA and MicroStrategy agree to include
an applicable copyright notice, as described in greater detail in Exhibit G, in
or on the media of all copies of the Developed Products or any Derivative Work.
4.5 DERIVATIVE WORKS. Neither party shall have the obligation to share or
disclose its own respective Derivative Works to the other party. Notwithstanding
the provisions of Section 8, either party may prepare and file a patent
application for its own Derivative Work in any country; provided that such party
(i) notifies the other party, in writing, at least sixty (60) days prior to
submitting such patent application; and (ii) describes the scope of the proposed
patent application and the countries in which it desires to seek patent
protection. The ownership of the patent on the Derivative Work and the
application therefor, excluding any patent or other intellectual property rights
related to the Developed Product underlying the Derivative Work or upon which
such Derivative Work is based, shall be vested in the party which is the
developer of
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such Derivative Work. Notwithstanding any of the foregoing, in no event shall
either party (the "Non-Creating Party") bring an action to enforce any rights to
seek remedies against the other party (the "Creating Party"), its customers or
licensees based upon a claim that the Creating Party's Derivative Works infringe
upon the Non-Creating Party's Intellectual Property Rights. Notwithstanding the
foregoing, nothing stated herein shall allow either party to create Derivative
Works in violation of its obligations with respect to Confidential Information
contained in Section 8 or to create Derivative Works which infringe upon the
other party's intellectual property rights related to the MicroStrategy Software
or the EA Products, as applicable.
4.6 TRADEMARK LICENSE. MicroStrategy hereby grants to EA an unrestricted,
terminable (pursuant to Section 10), non-exclusive, royalty-free, world-wide
license (without the right of sublicense) to use all trademarks and trade names
owned by MicroStrategy and associated with the Developed Products and the
MicroStrategy Software (herein the "TRADEMARKS") in conjunction with any
licensing and/or sublicensing, as applicable, of such products to end users in
accordance with the terms of this Agreement. EA agrees to state in appropriate
places, as designated by MicroStrategy and described in greater detail in
Exhibit H, that the Trademarks are the trademarks of MicroStrategy and to
include the symbols TM and (R) as appropriate. EA agrees to maintain the quality
of the EA Products licensed in connection with the use of the Trademarks, to use
the Trademarks in accordance with guidelines and instructions as may be
reasonably promulgated by MicroStrategy from time to time, and to provide to
MicroStrategy, upon reasonable request, representative samples of product
packaging using the Trademarks. EA agrees to take all actions reasonably
necessary or requested by MicroStrategy to protect MicroStrategy's rights in the
Trademarks.
4.7 CHANNEL DISTRIBUTION. Both parties agree to only license the Developed
Products directly to end users. Neither MicroStrategy nor EA will sell or
license the Developed Products to any third party distributor, subdistributor,
multiple tiers of subdistributors, any value-added reseller, resellers or
original equipment manufacturers (a "CHANNEL") without the express written
consent of the other party. In the event that the non-transferring party
consents to the proposed sublicensing or distribution of the Developed Products
by a Channel, the parties will negotiate in good faith the terms of a
three-party agreement providing, among other things as negotiated by the
parties, that MicroStrategy and EA would share in the revenue generated from the
sublicensing and/or distribution by the Channel of the integrated solutions that
include Developed Products, any EA Products and/or MicroStrategy Software
bundled therewith. Notwithstanding the foregoing, nothing stated herein shall
prohibit EA from sublicensing and/or distributing the Developed Products and/or
the MicroStrategy Software (subject to the other restrictions and obligations
set forth in this Agreement) using Axiom Corporation ("Axiom") as a Channel,
provided that Axiom sublicenses and/or distributes the foregoing software
products directly to End Users and not by means of a Channel. In the event of
the foregoing, the parties shall negotiate in good faith and mutually agree in
advance upon a revenue sharing arrangement that compensates MicroStrategy
adequately based upon the amount of MicroStrategy Software embedded or
integrated with each product sublicensed or distributed by Axiom.
4.8 ADDITIONAL USAGE RESTRICTIONS. Both parties acknowledge and agree that
either party may license the object code of the Developed Products and/or its
own respective Derivative Works (in object code format only) to end users in
accordance with its standard licensing practices, provided that such license
includes adequate prohibitions on obtaining Source Code
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through reverse engineering. For the purposes of this Agreement, the term
"SOURCE CODE" shall mean the human-readable coded version of the Developed
Products and all related program documentation such that a programmer reasonably
skilled in the relevant programming language could read, understand and modify
the Developed Products. For the avoidance of doubt, the parties acknowledge and
agree that the Developed Products may be used by the parties (but not their
licensees) to provide time sharing, service bureau and/or ASP services.
4.9 MICROSTRATEGY OEM LICENSE GRANTS TO MICROSTRATEGY SOFTWARE; OEM LICENSE
RESTRICTIONS.
(a) INTERNAL USE LICENSE. Subject to the fees payable hereunder,
MicroStrategy hereby agrees to grant to EA a royalty-free (except as provided in
Section 10), worldwide, limited (as provided in the License Agreement, as
defined below), non-exclusive and non-transferable license to use the
MicroStrategy Software in accordance with the terms and conditions set forth in
the form of License Agreement attached hereto as Exhibit I and hereby
incorporated by reference into this Agreement (the "LICENSE AGREEMENT"). The
foregoing license grant shall be coterminous with this Agreement and the VAR
Agreement. For the avoidance of doubt, EA may use the MicroStrategy Software in
connection with providing time sharing, service bureau and/or ASP services.
(b) DEVELOPMENT LICENSE. MicroStrategy hereby grants EA a
non-exclusive, non-transferable license to use the MicroStrategy Software in a
non-production environment for the limited purpose of establishing the
compatibility of the products included in the MicroStrategy Software with the EA
Products.
(c) LICENSE TO MARKET, SUBLICENSE AND DISTRIBUTE. MicroStrategy hereby
grants EA a license to copy (in object code form only), market, sublicense and
distribute the MicroStrategy Software and related User Documentation, including
any updates thereto provided to EA pursuant to this Agreement, in conjunction
with an Exchange Applications Solution and/or a Developed Product in the
Territory. All licenses to the MicroStrategy Software granted hereunder shall be
"ramped" or granted on a staggered basis in accordance with the delivery
schedule set forth in Exhibit J. This is not a license to market, sublicense or
distribute the MicroStrategy Software or User Documentation separately or to
copy the MicroStrategy Software for such purposes, and such action shall be a
material breach of this Agreement. EA shall sublicense and distribute the
MicroStrategy Software and User Documentation directly to end users solely
through a written sublicense agreement ("END USER LICENSE AGREEMENT") that
includes, at a minimum, contractual provisions that:
(i) Restrict use of the MicroStrategy Software solely to use with
an Exchange Applications Solution and/or a Developed Product. For purposes of
this provision, an "Exchange Applications Solution" is the combination of the EA
Products with the MicroStrategy Software in order to create a "CRM/eCRM
Application." For purposes of this subsection, a CRM/eCRM Application means an
application that contains a substantial customer-centric data model with at
least 100 elements and a reasonable number of packaged analytical reports (I.E.,
10 or more such reports). MicroStrategy acknowledges and agrees that there may
be more than one Exchange Applications Solution.
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(ii) Restrict use of the MicroStrategy Software to use in object
code form.
(iii) License the MicroStrategy Software on a named user basis
exclusively for each named end user's internal business purposes.
(iv) Prohibit transfer or duplication of the MicroStrategy Software
except for temporary transfer in the event of computer malfunction and
duplication as part of routine back-up procedures.
(v) Prohibit assignment of the MicroStrategy Software without the
prior written consent of EA.
(vi) Prohibit the use of the MicroStrategy Software by any third
party except agents and consultants of end users who have signed a
confidentiality agreement that requires at least a reasonable standard of care
in the protection of MicroStrategy Confidential Information.
(vii) Prohibit causing or permitting the reverse engineering,
disassembly or decompilation of the MicroStrategy Software.
(viii) Prohibit title to the MicroStrategy Software from passing to
end users.
(ix) Disclaim MicroStrategy's liability for damages, whether direct
or indirect, incidental or consequential, arising in connection with the End
User License Agreement.
(x) State that MicroStrategy makes no direct warranty of any kind
to end users under the End User License Agreement.
(xi) Prohibit disclosure to any third party of any results of any
benchmark tests or quantitative analyses of the MicroStrategy Software.
(xii) Require end users to use a commercially reasonable degree of
care to protect the Confidential Information of MicroStrategy and prohibit end
users from, directly or indirectly, (a) using any Confidential Information of
MicroStrategy to create any computer software program or user documentation that
is substantially similar to any MicroStrategy product or user documentation, or
(b) using or disclosing Confidential Information of MicroStrategy, except as
authorized by this Agreement.
(xiii) Disclaim MicroStrategy's liability for any taxes or duties,
however designated or levied (including, but not limited to sales, use and
personal property taxes).
(d) LICENSE TO DEMONSTRATE. MicroStrategy hereby grants to EA a license
to demonstrate the MicroStrategy Software in conjunction with an Exchange
Applications Solution and/or a Developed Product in the Territory. MicroStrategy
shall provide EA copies of the MicroStrategy Software for demonstration
purposes. EA shall take all reasonable precautions
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against unauthorized disclosure or copying of MicroStrategy Software while the
Exchange Applications Solution is being demonstrated. EA shall take all
reasonable steps to ensure that the MicroStrategy Software is inaccessible
during inactive demonstration times, delete any demonstration copies of the
MicroStrategy Software installed on the potential customer's computers upon
completion of any demonstration at a customer site and further exercise
commercially reasonable efforts to ensure the security of the MicroStrategy
Software.
(e) LICENSE TO GRANT EVALUATION LICENSES. MicroStrategy grants to EA a
license to allow Evaluations of the MicroStrategy Software in conjunction with
the EA Products in the Territory, but only pursuant to a written agreement that
contains the restrictions set forth in this Section. MicroStrategy shall provide
EA with copies of the MicroStrategy Software for Evaluations. EA shall take all
reasonable precautions against unauthorized disclosure or copying of
MicroStrategy Software during Evaluations. When an Evaluation ends, if an End
User does not license the Exchange Applications Solutions, EA shall require that
all copies of the Exchange Applications Solutions be promptly removed from such
end user's facilities and returned to EA.
(f) EA COVENANTS. In connection with the license granted in this
Section 4.9, EA covenants and agrees: (i) not to distribute the MicroStrategy
Software, except as part of an Exchange Applications Solution (as defined in
Section 4.9(c)(i)); (ii) not to distribute the MicroStrategy Software
electronically; and (iii) not to distribute the MicroStrategy Software through
Channels of distribution, except as permitted under Section 4.7.
(g) MICROSTRATEGY SOFTWARE OEM LICENSE RESTRICTIONS AND EA COVENANTS.
The rights granted in this Section 4.9 are expressly limited to and restricted
by the following:
(i) No copies may be made of MicroStrategy Software except as
explicitly authorized by this Agreement or the applicable End User License
Agreement. EA shall have no right to manufacture, modify, or copy User
Documentation. Notwithstanding the foregoing, EA shall have the right to make a
reasonable number of copies of the User Documentation for purposes consistent
with this Agreement, provided that such copies are of the same quality as the
originals as provided by MicroStrategy.
(ii) MicroStrategy reserves the right to amend, modify, enhance,
add to or delete from the list of MicroStrategy Software upon thirty (30) days'
written notice to EA so long as the list includes at all times any software
product then actively marketed by MicroStrategy in the United States, provided,
however, that such modifications to the list of MicroStrategy Software shall not
apply to proposals to end users outstanding on the notice date of such
modifications until the earlier of (i) the proposal expiration date or (ii)
sixty (60) days from the notice date, provided that EA provides a list of such
end users to MicroStrategy within thirty (30) days of the notice date. The list
of end users shall include (i) the name of the end user, (ii) the date of the
proposal, and (iii) the expiration date of the proposal. This Agreement shall
automatically cover all such amendments, modifications, or enhancements to the
list of MicroStrategy Software. MicroStrategy's support obligations for
MicroStrategy Software (for End Users and EA) that is phased out in accordance
with this subsection shall be handled pursuant to MicroStrategy's standard
support policies and procedures then in effect, but in no event, shall EA or its
end users be accorded less favorable treatment than MicroStategy's direct
11
customers. Notwithstanding the foregoing, EA shall continue to retain its
license rights under this Section 4.9 for all MicroStrategy Software, including
those products that are phased out or discontinued as provided above
(collectively, the "DISCONTINUED PRODUCTS"), provided, however, that,
notwithstanding the foregoing, MicroStrategy shall have no warranty, support,
indemnification or other obligations whatsoever with respect to the Discontinued
Products, which shall be licensed on an "AS IS" basis as of the date which is
thirty (30) days after the date of written notice to EA as provided herein. EA
shall be entitled to the source code to a Discontinued Product pursuant to the
terms and restrictions of the Source Code Escrow Addendum at such time, if ever,
that MicroStrategy ceases to provide Technical Support Services (as defined in
the Source Code Escrow Addendum) for that particular Discontinued Product.
(iii) EA agrees that it will not, either directly or through a
third party, use MicroStrategy Software, the source code, or a derivative
thereof, or any Confidential Information of MicroStrategy, to create, modify or
enhance any computer software programs or user documentation which is
functionally, visually, or otherwise identical or substantially similar to any
MicroStrategy Software.
(iv) EA agrees that it will not, either directly or through a third
party, reverse engineer, disassemble or decompile any of the MicroStrategy
Software, or make any attempt to obtain or derive the source code from any
MicroStrategy Software, whether or not such product is listed in Exhibit A.
(v) EA agrees that it will not permit any End Users to rent or
lease MicroStrategy Software or use of MicroStrategy Software (I.E., timeshares
or service bureaus).
(vi) Regardless of any disclosure by EA to MicroStrategy of an
ultimate destination of MicroStrategy Software, EA shall not transfer or
re-export MicroStrategy Software, any goods created with MicroStrategy Software,
related documentation, or other related proprietary information, to anyone
outside the United States as to which export may be in violation of the United
States export laws or regulations, without first obtaining the appropriate
license from the U.S. Department of Commerce and/or any other agency or
department of the U.S. Government, as required.
4.10 RESERVED RIGHTS. Any rights to or under MicroStrategy's Intellectual
Property Rights or the MicroStrategy Software not expressly granted in this
Agreement are expressly reserved by MicroStrategy. In addition, MicroStrategy
reserves the right to amend the list of provisions that must appear in the End
User License Agreement as set forth in Section 4.9(c)(ii) through (xiii) upon
ninety (90) days' advance, written notice; provided, however, that such amended
provisions shall be commercially reasonable and apply only to End User License
Agreements executed by EA subsequent to the expiration of the ninety (90) day
notice period.
4.11 INTELLECTUAL PROPERTY MARKINGS ON MICROSTRATEGY SOFTWARE. EA will
comply with MicroStrategy's instructions regarding the marking of the
MicroStrategy Software and accompanying User Documentation with a notice
reflecting MicroStrategy's ownership of certain Intellectual Property Rights
embodied therein.
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4.12 INFRINGEMENT BY THIRD PARTIES. If either party learns of any possible
infringement or misappropriation of the other party's Intellectual Property
Rights, it shall immediately give notice thereof to the other party. Each party
agrees to cooperate with the other party's reasonable efforts to seek legal
remedies for such infringements and misappropriations. In the event of any
successful claim of infringement (a "CLAIM") of the Intellectual Property Rights
embodied in the Developed Products against a third party or any settlement
thereof involving a monetary recovery, MicroStrategy and EA agree to share
equally the net proceeds derived from the disposition or settlement of such
Claim after deducting from such proceeds each party's costs in connection
therewith to the extent that such costs are not otherwise directly covered by
the settlement amount or court award.
5. WARRANTY; DISCLAIMER OF WARRANTIES.
5.1 WARRANTY. MicroStrategy warrants to EA for a period of ninety (90) days
from the date of delivery of the MicroStrategy Software to EA that each
unmodified MicroStrategy Software product will perform in substantial
conformance with the functions described in the User Documentation. In addition,
MicroStrategy warrants to EA through December 31, 2001 that the unmodified
MicroStrategy Software products will not fail or produce incorrect results when
processing with four (4)- digit dates for the year 2000; provided, however, that
MicroStrategy makes no warranty with respect to any such failure or incorrect
result that may arise due to: (i) the quality of the data sought to be processed
with the MicroStrategy Software; (ii) the effect of other software not licensed
by MicroStrategy to EA or developed by MicroStrategy for EA; or (iii) the use of
the MicroStrategy Software in an operating environment or on a platform not
specified by MicroStrategy. MicroStrategy Software warranty claims must be
brought within the warranty period. For any breach of the warranties contained
herein, EA's exclusive remedy and MicroStrategy's entire liability shall be, at
MicroStrategy's sole discretion, the correction of the MicroStrategy Software
errors that cause breach of the warranty, replacement of the MicroStrategy
Software which is experiencing the error or return of the License Fees allocable
to the non-conforming MicroStrategy Software product (or in the case of a breach
of the warranty contained in the second sentence of this Section 5.1, a
pro-rated portion of such license fees) upon EA's return of such MicroStrategy
Software product to MicroStrategy.
5.2 MICROSTRATEGY DISCLAIMER. EXCEPT AS PROVIDED HEREIN, THE MICROSTRATEGY
SOFTWARE IS BEING LICENSED "AS IS" WITHOUT WARRANTY OF ANY KIND. EXCEPT FOR THE
RIGHT OF EA TO CONFIRM THE RESULTS OF MICROSTRATEGY'S CONFORMANCE TESTS PURSUANT
TO SECTION 2.4, THE DEVELOPED PRODUCTS ARE BEING FURNISHED "AS IS" WITHOUT
WARRANTY OF ANY KIND. EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 5,
MICROSTRATEGY MAKES NO WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AS
TO ANY MATTER WHATSOEVER. IN PARTICULAR, ANY AND ALL WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE EXPRESSLY EXCLUDED.
5.3 EA DISCLAIMER. EXCEPT AS PROVIDED IN THIS AGREEMENT, EA MAKES NO
WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AS TO THE DEVELOPED
PRODUCTS AND/OR ITS DERIVATIVE WORKS.
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6. SUPPORT, MAINTENANCE AND CONSULTING.
6.1 EA SUPPORT OPTIONS. EA will have the option of either: (i) providing
level I support to end users ("END USERS") ("LEVEL 1 SUPPORT") for all
EA-branded offerings of the Developed Products with MicroStrategy providing
level 2 support ("LEVEL 2 SUPPORT"), or (ii) MicroStrategy providing both Level
1 and Level 2 Support for such offerings. Level 1 Support will consist of (i)
initial contact with the End User to define a code or documentation problem;
(ii) provision of answers to questions about product functionality to the extent
reasonably possible; and (iii) an attempt to resolve the call. Level 2 Support
will consist of (i) receipt of problem definition and scope and all related data
and materials from first level support personnel of EA; (ii) an attempt to
provide solutions or workarounds for the problem; (iii) formulation of plans for
collection of additional data relating to the problem; (iv) the collection of
additional data relating to the problem, and (v) the provision of bug fixes
and/or patches for problems in conformance with MicroStrategy's standard support
procedures then in effect.
6.2 SUPPORT ROYALTIES. Regardless of which of the options set forth in
Section 6.1 that EA chooses, EA shall pay to MicroStrategy a royalty of eight
percent (8%) of the license fees (assuming a maintenance rate of 16% of the
applicable end user license fees) EA receives for, or that are attributable to,
the MicroStrategy Software component of the product licensed by EA. The
MicroStrategy Software component value shall be calculated based on the lesser
of: (a) thirty percent (30%) of the MicroStrategy list price then in effect for
the MicroStrategy Software which is bundled with, or included in, the Exchange
Applications Solution, or (b) fifty percent (50%) of the actual price for the
Exchange Application Solution. This arrangement will be reciprocal for support
provided by EA (I.E., MicroStrategy will pay EA an 8% royalty) in connection
with MicroStrategy-branded offerings of the Developed Products. In connection
with the foregoing, each party agrees to charge End Users an amount equal to
sixteen percent (16%) of the applicable product license fees for maintenance and
support services. The royalty payment terms in Section 11.1 shall apply to the
payment of all royalties hereunder.
7. INDEMNITIES.
7.1 INDEMNIFICATION.
(a) MicroStrategy shall indemnify, defend and hold EA harmless from and against
any and all liabilities, losses, damages, fees, costs and expenses, including
without limitation reasonable attorneys' fees, incurred by EA resulting from a
third party claim, suit, action or proceeding (a "Claim") alleging that the
MicroStrategy Software, the Developed Products or MicroStrategy's Derivative
Works (collectively, the "Indemnified Products") infringes or misappropriates a
third party U.S. patent, copyright, trade secret or other intellectual property
right; provided that EA (i) promptly notifies MicroStrategy in writing of such
Claim; (ii) provides MicroStrategy sole control of the defense or settlement of
such claim; and (iii) provides MicroStrategy assistance at MicroStrategy's
request and reasonable expense. EA may participate in the defense or settlement
of the Claim at its own expense. If a final injunction is obtained against EA
for use of the MicroStrategy Software or the Developed Products or licensing of
the Developed Products in accordance with the terms of this Agreement, or if
MicroStrategy reasonably believes that such injunction is likely, MicroStrategy
may, at its option and its expense, either (i) procure for EA the right to
continue using and/or licensing the
14
MicroStrategy Software or the Developed Products, as applicable, or (ii) modify
the MicroStrategy Software or the Developed Products, as applicable, or the
infringing portions thereof so that they become non-infringing. If in
MicroStrategy's opinion neither of the above is commercially feasible, EA shall
promptly cease licensing the infringing MicroStrategy Software, or the Developed
Products, as applicable, and MicroStrategy shall pay to EA an amount equal to
the License Fee, reasonably attributable to such component as a fraction of all
licenses granted hereunder depreciated on a three-and-one-half (3 1/2) year
straight line basis, calculated backwards from the date of infringing event to
the Effective Date. MicroStrategy will have no liability or obligation to
indemnify for any claim arising from (i) the combination of the Indemnified
Products with EA or third party materials or intellectual property, unless such
infringement would have occurred without such combination; (ii) the modification
or translation of the Indemnified Products or any portion of the MicroStrategy
Technology by EA or any third party not authorized to do so by MicroStrategy
(collectively, "EA Modifications"); (iii) any use by EA of the Indemnified
Products after directed by MicroStrategy to discontinue use thereof; or (iv) any
Improvements to the Indemnified Products created by a party other than, or not
specifically authorized by, MicroStrategy.
(b) EA shall indemnify, defend and hold MicroStrategy harmless from and
against any and all liabilities, losses, damages, fees, costs and expenses,
including without limitation reasonable attorneys' fees, incurred by
MicroStrategy resulting from the EA Modifications or from a Claim that the
manufacture, use or licensing by EA of the MicroStrategy Software and/or the
Developed Products other than in accordance with the terms of this Agreement or
that EA's Derivative Works infringes any patent, copyright or other proprietary
rights of any third party or misappropriates any trade secret of any third
party; provided that such Claim is not a Claim based on the Indemnified Products
for which MicroStrategy indemnifies EA pursuant to Section 7.1(a); and provided
further that MicroStrategy (i) promptly notifies EA in writing of such Claim;
(ii) provides EA sole control of the defense or settlement of such claim; and
(iii) provides EA reasonable assistance at EA's request and expense.
(c) Any failure by either party to promptly notify the other of a claim
for which indemnification may be sought or to cooperate in such claim shall only
relieve the other of its indemnity obligations hereunder to the extent that it
is prejudiced by the delay or failure to cooperate.
7.2 ENTIRE LIABILITY. The foregoing provisions of this Section 7 state the
entire liability and obligations of each party and the exclusive remedy of each
party with respect to any alleged Intellectual Property Rights infringement or
misappropriation by the MicroStrategy Software, the Developed Products, the
Derivative Works or the parties' respective Technology incorporated in the
Developed Products. Neither party shall be liable for claims by the other
party's end users relating to the Developed Products, the EA Products and/or the
Exchange Applications Solution.
8. CONFIDENTIALITY.
8.1 CONFIDENTIALITY. Each party hereto will maintain in confidence all
Confidential Information disclosed by the other party hereto. Neither party will
use, disclose or grant use of such Confidential Information except as expressly
authorized by this Agreement. To the extent
15
that disclosure is authorized by this Agreement, the disclosing party will
obtain prior written agreement from its employees, agents or consultants to whom
disclosure is to be made to hold in confidence and not make use of such
information for any purpose other than those permitted by this Agreement, and
each party shall be liable for the unauthorized disclosure of the other party's
Confidential Information by such employees, agents or consultants. Each party
will use at least the same standard of care as it uses to protect its own most
confidential information to ensure that such employees, agents or consultants do
not disclose or make any unauthorized use of such Confidential Information. Each
party will promptly notify the other upon discovery of any unauthorized use or
disclosure of the Confidential Information. In no event shall either party
disclose the other party's confidential information to the disclosing party's
competitors as defined in Exhibit K (the "Competitors") even if such Competitor
is a consultant or contractor of the receiving party.
8.2 EXCEPTIONS. The obligations of confidentiality contained in Section 8.1
will not apply to the extent that such Confidential Information:
(a) was already known to the receiving party, other than under an
obligation of confidentiality to the disclosing party, at the time of disclosure
by the other party;
(b) was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the other party;
(c) became generally available to the public or otherwise part of the
public domain after its disclosure and other than through any act or omission of
the receiving party in breach of this Agreement;
(d) was disclosed to the receiving party, by a third party who had no
obligation to the disclosing party not to disclose such information to others;
(e) is independently developed by the receiving party without reference
to the Confidential Information;
(f) was the subject of a court- or government-ordered disclosure,
provided that the disclosing party gives reasonable prior notice to the
non-disclosing party and limits the scope and the instances of the disclosure to
that required by the relevant order and cooperates and assists the disclosing
party in obtaining a protective order relating to such disclosure, if
applicable.
9. LIMITATION OF LIABILITY. EXCLUDING EACH PARTY'S INDEMNIFICATION OBLIGATIONS
FOR DAMAGES PAYABLE TO A THIRD PARTY FOR INFRINGEMENT OF THIRD PARTY
INTELLECTUAL PROPERTY RIGHTS AND BREACHES OF THE CONFIDENTIALITY OBLIGATIONS SET
FORTH IN SECTION 8, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR TO ANY
ENTITY CLAIMING THROUGH OR UNDER THE OTHER PARTY FOR ANY LOSS OF USE, PROFIT OR
INCOME, ANY LOST DATA, ANY WORK STOPPAGE, ANY EQUIPMENT DOWNTIME, OR FOR ANY
CONSEQUENTIAL, INCIDENTAL, INDIRECT, PUNITIVE, OR SPECIAL DAMAGES, WHETHER IN AN
ACTION FOR CONTRACT OR TORT OR BASED ON A WARRANTY, IN CONNECTION WITH THIS
AGREEMENT, EVEN IF SUCH PARTY HAS
16
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EXCLUDING EACH PARTY'S
INDEMNIFICATION OBLIGATIONS FOR DAMAGES PAYABLE TO A THIRD PARTY FOR
INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS AND BREACHES OF THE
CONFIDENTIALITY OBLIGATIONS SET FORTH IN SECTION 8, IN NO EVENT SHALL EITHER
PARTY'S LIABILITY TO THE OTHER HEREUNDER EXCEED THE LICENSE FEES PAID TO
MICROSTRATEGY PURSUANT TO THIS AGREEMENT. The foregoing limitations are
independent from all other terms and provisions of this Agreement and shall
apply notwithstanding the failure of any remedy provided herein.
10. TERM; TERMINATION BASED UPON CERTAIN OCCURRENCES.
10.1 TERM; EFFECT OF TERMINATION BY EA. This Agreement shall commence upon
the Effective Date and shall continue for an initial term of three-and-one-half
(3 1/2) years. Notwithstanding the foregoing, EA may terminate the obligations
of the Business Unit set forth in Section 2.1 and Exhibit C at any time during
the initial term upon (i) 30 days' prior notice if such notice occurs prior to
June 30, 2000, or (ii) 60 days' prior notice if such notice occurs at any time
thereafter. If EA elects to terminate the Business Unit obligations as provided
above, EA will be relieved of any payment not yet due and payable to
MicroStrategy pursuant to the Payment and Registration Rights Agreement. If EA
elects to terminate the Business Unit obligations during the first four (4)
quarters of this Agreement, then MicroStrategy shall have the right to
immediately terminate the Xxxxxxxx.xxx Master Affiliation Agreement described in
greater detail in Section 13 hereof and to immediately cease all development,
engineering and related work hereunder, provided that MicroStrategy shall make
the Deliveries as specified in this Agreement. In addition, if EA elects to
terminate the Business Unit obligations, then this Agreement shall terminate and
be superseded by the VAR Agreement, and the Credit as defined and described in
Section 10.3 shall apply. If EA terminates this Agreement based upon a material
breach by MicroStrategy pursuant to Section 11.4, then this Agreement shall be
superseded and converted into the VAR Agreement. In addition, in the event that
this Agreement is converted into a VAR Agreement as described in the preceding
sentence, then the Credit defined and described in Section 10.3 shall apply.
10.2 RENEWAL OPTIONS. EA shall have the right to extend the OEM license
rights contained in Section 4.9 of this Agreement for an additional three (3)
year term for a fee of $30,000,000, provided that EA has not exercised its
termination rights pursuant to Section 10.1 prior to the expiration of the
initial term. In addition, EA shall have the right to extend the Business Unit
commitment set forth in Section 2.1(a) for an additional three (3) year term for
a fee of $30,000,000, provided that EA has not exercised its termination rights
pursuant to Section 10.1 prior to the expiration of the initial term.
Alternatively, the parties agree that EA may extend the term of the OEM license
rights hereunder pursuant to the VAR Agreement for additional one (1) year terms
in consideration of the payment of incremental per unit royalties for the
MicroStrategy Software (as bundled with the EA Products) equal to the thirty
percent (30%) of the then-current list prices for such software. The renewal
option described in the immediately preceding sentence shall not be exercisable
by EA in the event that MicroStrategy terminates this Agreement pursuant to
Section 11.4 based upon a material breach by EA.
17
10.3 TERMINATION BASED UPON THE OCCURRENCE OF A QUALIFIED EVENT. In the
event of a Qualified Event, the party which is not the subject of such event may
terminate this Agreement, provided that such termination occurs within ninety
(90) days after the closing date of the Qualified Event. Upon any such
termination, this Agreement shall be superseded by the VAR Agreement, including,
without limitation, a provision for a credit toward future royalties payable to
MicroStrategy in an amount equal to $30 million less 30% of the list price for
all MicroStrategy Software licensed by EA prior to the date of
termination/conversion (the "CREDIT"). In the event of the foregoing, the
royalty for the MicroStrategy Software payable to MicroStrategy will be 30% of
the then-current list prices for such products until the credit is exhausted
and, thereafter, shall be 35% of the then-current list prices for such products.
11. ROYALTIES; TAXES; AUDIT; TERMINATION FOR BREACH; ADDITIONAL EFFECTS OF
TERMINATION.
11.1 MAINTENANCE ROYALTY PAYMENT TERMS. All royalties accruing in a
particular calendar quarter shall be paid within thirty (30) days after the end
of each such calendar quarter and shall be accompanied by a report detailing the
number of Exchange Applications Solutions licensed (or the nature of support
provided, if applicable pursuant to Section 6.2) during the quarter to which the
royalty payment set forth above applies, the rates at which royalties were
computed, the amount of royalties due, and all additional details reasonably
necessary to show how these amounts were determined.
11.2 TAXES. The license fees specified in this Agreement are exclusive of
any sales, use, excise, or similar taxes, and of any export and import duties,
which may be levied upon or collectible by either party as a result of the
licensing or shipment of products to end users, any services performed under
this Agreement and use of products by end users. Each party agrees to pay and
otherwise be fully responsible for, and indemnify and hold the other harmless
from and against any and all such taxes and duties, unless in lieu thereof the
party responsible for collecting such taxes provides to the other an exemption
certificate acceptable to the relevant governmental authorities. Notwithstanding
the foregoing, each party, to the extent permitted by applicable law, shall have
the right to claim any and all costs expended pursuant to this Agreement for
qualified research and development per Internal Revenue Code Section 41,
research tax credit.
11.3 AUDIT.
(a) RECORDS. EA shall keep complete and accurate records pertaining to
the licensing of the Exchange Applications Solutions. Such records will be
maintained for a five (5) year period following the year in which any license
fee and/or maintenance fee payments are made by customers pertaining to the
licensing of Exchange Applications Solutions or the provision of services
related thereto.
(b) AUDIT REQUEST. MicroStrategy will have the right to engage, at its
own expense, an independent auditor reasonably acceptable to EA, to examine EA's
records not more than twice per calendar year to determine, with respect to any
calendar year, the correctness of any report or payment made under this
Agreement. If any such audit reveals an underpayment of more than five percent
(5%) of the correct amount of royalties due hereunder, such audit will be
18
at the expense of EA. If any audit shall show that EA underpaid any royalties
due to MicroStrategy as to the period subject to the audit, then EA shall
immediately pay to MicroStrategy any such deficiency with interest thereon at a
rate equal to the lower of one and a half percent per month or the highest rate
allowed by law from the date due until paid.
11.4 TERMINATION FOR BREACH. If either party materially defaults in the
performance of its obligations hereunder or under the other Operative
Agreements, the defaulting party agrees to use its commercially reasonable
efforts to correct the default within thirty (30) days after written notice of
default from the non-defaulting party. If any such default is not corrected
within the cure period, then the non-defaulting party at its option may, in
addition to any other remedies it may have, terminate this Agreement at the end
of such cure period.
11.5 ADDITIONAL EFFECTS OF TERMINATION.
(a) RETURN OF DOCUMENTATION AND CONFIDENTIAL INFORMATION. Upon any
termination of this Agreement, each party shall immediately return to the other
party all documentation, Confidential Information and any other tangible items
in its possession or under its control evidencing the know-how of the other
party, except as provided in the VAR Agreement and except with respect to
Confidential Information related to the Developed Products.
(b) LICENSE TERMINATION, MICROSTRATEGY DELIVERIES. Except as set forth
in this Agreement, upon any termination of this Agreement, all licenses granted
by either party under this Agreement shall be terminated. In the event of a
termination of this Agreement for any reason, excluding termination based on a
material breach by EA in the form of a failure to make payment as required by
the Payment and Registration Rights Agreement, MicroStrategy shall promptly make
the Deliveries (as defined in Section 2.1(a)).
(c) INVENTORY. Upon termination of this Agreement resulting from a
breach by EA, EA shall cease all marketing efforts for the Product and shall
return any and all copies of the Product to MicroStrategy. In the case of the
foregoing, MicroStrategy shall have no ongoing obligations with respect to
delivery of the Product to end user customers. Upon termination of this
Agreement resulting from a breach by MicroStrategy, MicroStrategy shall be
obligated to fulfill all orders for the delivery of Products which were licensed
to end user customers prior to the termination date of this Agreement.
(d) ONGOING SUPPORT. Upon termination of this Agreement, MicroStrategy
and/or EA shall be entitled to provide reasonable support to customers as set
forth in this Agreement; provided, however, that such support shall not include
any updates or upgrades to the Product other than minor error corrections or
repairs.
(e) SURVIVAL. Except as otherwise set forth in the applicable section,
the following sections shall survive a termination or expiration of this
Agreement : 4 (other than 4.9), 5, 7, 8, 9, 10, 11, 12 and 14.
12. EQUITABLE RELIEF. Neither party shall be precluded hereby from securing
equitable remedies in courts of any jurisdiction, including, but not limited to,
temporary restraining orders
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and preliminary injunctions to protect its rights and interests but such relief
shall not be sought as a means to avoid or stay mediation or arbitration.
13. XXXXXXXX.XXX MASTER AFFILIATION. On the Effective Date and upon the
execution by EA of a Xxxxxxxx.xxx Master Affiliation Agreement in the form set
forth in Exhibit L, MicroStrategy shall xxxxx XX "Master Affiliate" status for
Xxxxxxxx.xxx as provided in such agreement.
14. GENERAL PROVISIONS.
14.1 ASSIGNMENT. Neither party may assign this Agreement or any right under
this Agreement (except as provided in Section 10.3 or Section 4.1), nor delegate
any obligation under this Agreement, without the other party's prior written
consent. The rights and obligations of the parties under this Agreement shall be
binding upon and inure to the benefit of the successors and permitted assigns of
the parties. Any attempted assignment or delegation in contravention of this
Section 14.1 shall be null and void.
14.2 FORCE MAJEURE. Neither party shall be liable to the other party, under
this Agreement or otherwise, for any delay or lack of performance (other than
non-payment) resulting from an event of Force Majeure (as defined below). If a
Force Majeure event occurs, the party prevented from performing its obligations
under this Agreement shall inform the other party as soon as possible and the
time period for performance shall be extended by a period equivalent to the
delay caused by the Force Majeure event plus any additional period reasonably
necessary to allow the prevented party to resume performance of its obligations.
The prevented party shall inform the other party as soon as possible after the
Force Majeure event ends. If the Force Majeure event lasts for more than one
hundred and twenty (120) consecutive days after the initial notice of such
event, the parties shall attempt in good faith to solve the problem of further
performance of this Agreement through friendly consultation. If the parties
cannot solve the problem of further performance within an additional sixty (60)
days, either party may terminate this Agreement without penalty. As used above,
an event of "Force Majeure" means any act of God, war, fire, typhoon, flood,
earthquake, natural disasters, governmental action, labor disruptions, materials
shortages, or any other event beyond the reasonable control of the prevented
party.
14.3 NOTICES. All notices and other communications provided for hereunder
shall be in writing and shall be mailed by first-class, registered or certified
mail, postage paid, or delivered personally, by overnight delivery service or by
facsimile, with confirmation of receipt, addressed as follows:
If to MicroStrategy: MicroStrategy Incorporated
0000 Xxxxxx Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxx Xxxxxxxxxx, Esq.
Fax No.: (000)000-0000
With a copy to: Xxxxx X. Xxxxx, Esq.
Xxxxxx Godward LLP
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000-0000
Fax No.: (000)000-0000
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If to EA: Exchange Applications
One Lincoln Plaza
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxx, President and
Xxxxx Xxxxxxxx, Vice President
Fax No.: (000)000-0000
With a copy to: Xxxx Xxxxxxxx, Esq.
Xxxxxxx, Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax No. (000) 000-0000
Either party may, by like notice, specify or change an address to which notices
and communications shall thereafter be sent. Notices sent by facsimile shall be
effective upon confirmation of receipt, notices sent by mail or overnight
delivery service shall be effective upon receipt or upon refusal of delivery,
and notices given personally shall be effective when delivered or when delivery
is refused.
14.4 GOVERNING LAW AND VENUE. All matters arising in connection with this
Agreement or the enforcement or construction thereof shall be governed by and
resolved in accordance with the laws of State of New York, without regard to
conflict-of-laws provisions. Service of process in any suit, action or
proceeding may be made in any manner permitted by law.
14.5 CONSTRUCTION. The headings of sections and subsections of this
Agreement are for convenience only and shall not be construed to affect the
meaning of any provision of this Agreement. Any inconsistency between provisions
in this Agreement and the exhibits shall be resolved in favor of the main body
of this Agreement.
14.6 RELATIONSHIP OF THE PARTIES. Except as expressly provided herein,
neither party is, nor will be deemed to be, an agent or legal representative of
the other party for any purpose. Neither party will be entitled to enter into
any contracts in the name of or on behalf of the other party, and neither party
will be entitled to pledge the credit of the other party in any way or hold
itself out as having authority to do so. Neither party will incur any debts or
make any commitments for the other, except to the extent, if at all,
specifically provided herein.
14.7 WAIVER. No provision of the Agreement, unless such provision otherwise
provides, will be waived by any act, omission or knowledge of a party or its
agents or employees
21
except by an instrument in writing expressly waiving such provision and signed
by a duly authorized officer of the waiving party.
14.8 SEVERABILITY. Whenever possible, each provision of the Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of the Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of the
Agreement.
14.9 ENTIRE AGREEMENT; MODIFICATIONS. This Agreement, together with the
Exhibits attached hereto and the Operative Agreements, constitutes the entire
agreement between the parties and supersedes all prior oral or written
negotiations and agreements between the parties with respect to the subject
matter hereof. Any and all representations and warranties set forth in the
Exhibits and/or Schedules hereto shall be incorporated herein by reference and
be deemed a material part of this Agreement. No modification, variation or
amendment of this Agreement shall be effective unless made in writing and signed
by the parties. Any additional or different terms stated in any purchase order
or other document delivered to EA by MicroStrategy in connection with this
Agreement shall have no effect.
IN WITNESS WHEREOF, EA and MicroStrategy have each caused this Agreement to
be executed by their duly authorized representatives.
MICROSTRATEGY INCORPORATED EXCHANGE APPLICATIONS, INC.
By: By:
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Name: Name:
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Title: Title:
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