1
EXHIBIT 10.13
Sagent KK Non-Exclusive Japanese Distribution Agreement
Sagent KK Japan
and
Kawasaki Steel Systems R&D Corporation
December 17, 1997
Palo Alto, California, U.S.A
2
SAGENT KK NON-EXCLUSIVE JAPANESE DISTRIBUTION AGREEMENT
This Sagent KK Non-Exclusive Japanese Distribution Agreement ("Agreement"),
effective as of this day of ____________________ (the "Effective Date"), is
entered into at Palo Alto, California, U.S.A., by and between Sagent KK Japan,
having offices in Japan ("Sagent KK"), and Kawasaki Steel Systems R&D
Corporation, having offices at 0-0-0, Xxxxxx, Xxxx-xx, Xxxxx 000, Xxxxx
("Distributor").
BACKGROUND
Sagent KK is in the business of developing and licensing computer software.
Distributor desires to market and distribute such computer software in the
Territory (as defined below), and Sagent KK agrees to authorize Distributor to
so market and distribute such computer software, pursuant to the terms and
conditions set forth below.
AGREEMENT
Now, therefore, in consideration of the foregoing and the mutual covenants and
conditions contained herein, the parties agree as follows:
1. DEFINITIONS
1.1 "Products" shall mean those products listed in Exhibit-A attached
hereto, as such products may be added to or abandoned by Sagent KK in Sagent
KK's sole discretion from time to time during the term of this Agreement.
1.2 "Software Products" shall mean the computer software in executable
form in the Products.
1.3 "Manuals" shall means the quick reference, manuals, technical
references etc. all of which are fixed to the paper as documents with respect to
the Products.
3
1.4 Sale and Purchase of Products. All references in this Agreement to
the "sale" or "selling" of Products that are computer software shall mean a
license to use such Products and the sale of the tangible media on which the
Products are distributed. All references in this Agreement to the "purchase" of
Products that are computer software shall mean a license to use such Products
and the purchase of the tangible media on which the Products are distributed.
1.5 "Territory" shall be all of Japan.
1.6 "Acceptance Date" shall have the meaning set forth in Section 13.1.
2. APPOINTMENT
2.1 Appointment of Distributor. Conditioned upon Distributor's continued
satisfaction of the terms and conditions of this Agreement, Sagent KK hereby
appoints Distributor, and Distributor hereby accepts appointment, as Sagent KK's
non-exclusive Distributor for the licensing, sale and distribution of Products
to customers in the Territory only for use in the Territory, provided that the
said customer may export its application programs developed by it using the
Products to its subsidiary or affiliated companies located outside the
Territory. Distributor shall not reproduce the Products, and Distributor shall
not license, sell or distribute the Products except as expressly set forth in
this Agreement. Distributor agrees that it shall not offer for sale, sell,
license or otherwise distribute Products acquired by it from any entity other
than directly from Sagent KK without the prior written approval of Sagent KK.
2.2 Distribution outside the Territory. Distributor shall limit its
sales activities with respect to the Products to customers located in the
Territory, and shall refrain from marketing, licensing or selling the Products
outside of the Territory except to the extent such activities may not be
restricted under applicable law.
2.3 Appointment of Subdistributors. Distributor may appoint
subdistributors to act on the Distributor's behalf only on prior written
approval of Sagent KK;
4
provided, however, that any compensation to such subdistributors shall be solely
the Distributor's responsibility. Any agreement with such agent or
subdistributor with respect to Products shall be coterminous with this
Agreement.
2.4 Independent Contractor Status. The relationship of Sagent KK and
Distributor established by this Agreement is that of independent contractors,
and neither party is an employee, agent, partner or joint venture of the other.
Distributor shall not be considered an agent or legal representative of Sagent
KK for any purpose, and neither Distributor nor any director, officer, agent, or
employee of Distributor shall be, or be considered, an agent or employee of
Sagent KK. Distributor is not granted and shall not exercise the right or
authority to assume or create any obligation or responsibility on behalf of or
in the name of Sagent KK. All sales and other agreements between Distributor and
its customers and subdistributors are Distributor's sole responsibility and will
have no effect on Sagent KK's obligations under this Agreement.
2.5 Operations and Expenses. The detailed operations of Distributor
under this Agreement are subject to the sole control and management of
Distributor. Distributor shall be responsible for all of its own expenses and
employees. Distributor shall provide, at its own expense, such office space and
facilities, and hire and train such personnel, as may be required to carry out
its obligations under this Agreement. Distributor agrees that it shall incur no
expense chargeable to Sagent KK, except as may be specifically authorized in
advance in writing in each case by Sagent KK.
2.6 No Other Rights. Except as expressly provided in this Agreement, no
right, title or interest is granted by Sagent KK to Distributor. Sagent KK may
distribute the Products in the Territory, either directly or indirectly, for any
and all uses, and no right, title or interest is granted by Sagent KK to
Distributor relating to products other than the Products.
3. OBLIGATIONS OF DISTRIBUTOR
3.1 Diligence. Distributor shall use its commercially reasonable efforts
to promote the marketing and distribution of the Products.
5
3.2 Costs and Expenses. Except as expressly set forth herein,
Distributor shall be solely responsible for all costs and expenses related to
the advertising, marketing, promotion, and distribution of the Products and for
performing its obligations hereunder.
3.3 Promotional Materials. Distributor shall maintain an adequate
inventory of Sagent KK's current sales materials and samples ("Sales Materials")
and shall use such Sales Materials in an efficient and effective manner to
promote the sale of the Products in the Territory. Distributor shall translate
Sales Materials into all applicable languages of the Territory at Distributor's
sole expense for distribution to customers, and Distributor shall prepare and
distribute such translated Sales Materials in a professional format consistent
with Sagent KK's original materials, subject to final approval by Sagent KK
("Translated Works"). Distributor agrees that all Translated Works created by
Distributor, and all intellectual property rights therein, shall be the sole
property of Sagent KK, and Distributor hereby assigns to Sagent KK all worldwide
right, title, and interest to the Translated Works and all intellectual property
therein.
3.4 Reports.
3.4.1 Annual Financial Reports. Distributor shall provide to
Sagent KK annual audited financial reports, which reports shall (i) be provided
to Sagent KK no later than three (3) months after the close of Distributor's
applicable fiscal year, and (ii) be treated as Confidential Information pursuant
to the terms of Article 10 below.
3.4.2 Sales Activities. Within thirty (30) days after the end
of each calendar quarter, Distributor shall send to Sagent KK a sales activities
report including the names of customers, quantities of Products purchased, Yen
amounts invoiced to and received from such customers, and customer backlog and
inventory status of Products, and further shall maintain records of the same.
6
3.5 Relations with Customers. Distributor shall process and ship each
customer order in a timely fashion. Distributor shall provide to customers any
and all instructions, precautions, and other warnings provided by Sagent KK to
Distributor; and Sagent KK shall provide to Distributor any such instructions,
precautions, and other warnings as Sagent KK in its sole discretion deems
necessary or desirable.
3.6 Product Representations. Distributor shall not to make any
representations with respect to the Products other than those expressly
authorized in writing in Sagent KK's written data sheets.
3.7 Indemnification. Distributor agrees to indemnify and hold Sagent KK,
its officers, directors, employees, successors, and assigns harmless from and
against any and all losses, damages, or expenses of whatever form or nature,
including reasonable attorneys' fees and other reasonable costs of legal
defense, whether direct or indirect, that they, or any of them, may sustain or
incur as a result of any acts or omissions of Distributor or any of its
directors, officers, employees, or agents, including but not limited to (i)
breach of any of the provisions of this Agreement, (ii) negligence or other
tortious conduct, (iii) representations or statements not specifically
authorized by Sagent KK herein or otherwise in writing, or (iv) violation by
Distributor (or any of its directors, officers, employees, or agents) of any
applicable law, regulation, or order in or of the Territory or the United
States.
4. PRODUCTS
4.1 Product Prices. The prices to be paid by Distributor to Sagent KK
for Products hereunder shall be List Prices for the Products less the
discount(s) set forth in Exhibit-B attached hereto ("Prices"). "List Prices" as
used herein shall mean the prices set forth in Sagent KK's then-current customer
price schedules or bulletins. Prices shall be F.O.B. Sagent KK's facilities in
Tokyo, Japan. All prices are expressed and shall be payable in Japanese Yen. The
difference between List Prices and Prices shall be Distributor's sole
remuneration from Sagent KK for the distribution and sale of Products hereunder.
7
Sagent KK gives Distributor an option ("Option") to increase
discount rate as set forth in Exhibit-B hereto. Distributor may exercise the
Option by providing written notice to Sagent KK thirty (30) days prior to the
first anniversary of the Acceptance Date. In this case, the quarterly minimum
guaranteed revenue of Sagent KK as set forth in Exhibit C attached hereto shall
increase as set forth therein.
4.2 Price Changes. List Prices are subject to change by Sagent KK at any
time in its sole discretion. List Price changes shall be effective immediately
and applicable to all purchase orders whether or not accepted prior to the
effective date of the List Price change.
4.3 Product Changes. Sagent KK reserves the right from time to time in
its sole discretion, without incurring any liability to Distributor with respect
to any previously placed Purchase Order (as defined in Section 5.1 below), to
discontinue or to limit its production of any Product; to allocate, terminate or
limit deliveries of any Product in time of shortage; to alter the design or
construction of any Product; to add new and additional products to the Products;
and upon prior consent of Distributor, to materially change its sales and
distribution policies which may affect the conditions contained in this
Agreement, not inconsistent with the terms of this Agreement.
4.4 Discontinued Product. In the event Sagent KK discontinues sale of
any Product, it shall give Distributor prompt notice thereof. Within sixty (60)
days following the date of such discontinuation notice, Distributor may elect to
return for credit against future purchases hereunder any of the discontinued
Products (including samples) purchased by Distributor during the three (3)
months prior to the date of such notice which have not been used or sold and
which are in Distributor's inventory as of the date of that notice from Sagent
KK.
5. PURCHASE ORDERS
5.1 Purchase Orders. All orders for Products submitted by Distributor
shall be initiated by written purchase order in form acceptable to Sagent KK
(each a
8
"Purchase Order"); provided, however, that an order may initially be placed
orally, by fax or by e-mail if a confirmational Purchase Order is received by
Sagent KK within five (5) days of said oral, fax, or e-mail order. All Purchase
Orders for Products are subject to acceptance by Sagent KK in writing, and
Sagent KK shall have no liability to Distributor with respect to Purchase Orders
that are not accepted. No partial acceptance of a Purchase Order shall
constitute the acceptance of the entire Purchase Order, absent the written
acceptance of such entire Purchase Order.
5.2 Agreement Governs. Purchase Orders shall be governed by the terms of
this Agreement. Nothing contained in any Purchase Order shall in any way modify
or delete the terms and conditions contained herein or add any additional or
different terms or conditions to the terms and conditions of this Agreement.
5.3 Order Changes. Purchase Orders may be canceled only with Sagent KK's
prior written approval. Cancellation of a Purchase Order is subject to a
restocking charge equal to ten percent (10%) of the aggregate value of such
Purchase Order.
5.4 Marketing.
5.4.1 Use of Proprietary Right. Distributor may represent
itself as "the authorized distributor of Sagent Technology, Inc. ("Sagent US")
and is authorized by Sagent KK to use, and shall use, the trademarks, trade
names, and logos that Sagent KK uses for the Products in connection with
Distributor's advertisement, promotion, and distribution of the Products,
provided that Sagent KK shall have reviewed and approved of all materials used
in connection therewith. Distributor's use of such trademarks, trade names, and
logos will be in accordance with Sagent KK policies in effect from time to time
regarding trademark, trade name, and logo usage. Distributor agrees not to affix
any Sagent KK trademark, trade name, or logo to any non-Sagent KK product.
5.4.2 Grant of Proprietary Right. Distributor will include on
each Product that it distributes, and on all containers and storage media
thereof, all
9
trademark, trade name, copyright, and other notices of proprietary rights
included by Sagent KK on such Product. Distributor agrees not to alter, erase,
deface, or overprint any such notice on anything provided by Sagent KK.
Distributor has paid no consideration for the use of Sagent KK's trademarks,
trade names, Logos, or copyrights, and nothing contained in this Agreement shall
give Distributor any interest in any of them. Distributor acknowledges that
Sagent KK owes and retains all copyrights and other proprietary rights in the
Products and agrees that it will not at any time during or after the term of
this Agreement assert or claim any interest in or do anything that may adversely
affect the validity or enforceability of any trademark, trade name, copyright,
or logo belonging to or licensed to Sagent KK (including, without limitation,
any act, or assistance to any act, which may infringe on lead to the
infringement of any copyright in the Products).
5.4.3 Protection of Proprietary Right. Distributor agrees to
use reasonable efforts to protect Sagent KK's and Sagent US' proprietary rights
and to cooperate without charge in Sagent KK's and Sagent US's efforts to
protect its proprietary rights. Distributor agrees to promptly notify Sagent KK
and Sagent US of any known or suspected breach of Sagent KK's or Sagent US's
proprietary rights that comes to Distributor's attention. If the party
committing, or suspected to be committing, such a breach is a customer of
Distributor, Distributor shall take legal action, at its own expense, against
such party so as to immediately terminate any such breach.
6. PAYMENT; TAXES
6.1 Payment Terms. Payment of any and all amounts due under this
Agreement shall be in Japanese Yen. Distributor shall either (i) pay for
Products at the end of the immediately following month during which Distributor
receives such Products by wire transfer to Sagent KK's designated bank account.
All exchange, interest, banking, collection and other charges shall be at
Distributor's expense.
6.2 Offsets. Any credits, allowances, or other amounts payable to or
creditable by Distributor shall be subject to offset for any claims or other
amounts owed by Distributor to Sagent KK pursuant to the provisions of this
Agreement.
10
6.3 Taxes. Prices do not include and are net of any domestic
governmental taxes or charges of any kind that may be applicable to the sale,
licensing, marketing or distribution of the Products, including without
limitation excise, sales, use, consumption or value-added taxes. Distributor
shall be responsible for and shall pay all such taxes and charges levied against
Sagent KK in a timely manner. When Sagent KK has the legal obligation to pay or
collect such taxes, excluding consumption tax and taxes on the income of Sagent
KK, the appropriate amount shall be invoiced to Distributor and paid by
Distributor within thirty (30) days of the date of invoice unless Distributor
provides Sagent KK with a valid tax exemption certificate authorized by the
appropriate taxing authority.
7. DELIVERY; REJECTION
7.1 Shipment and Delivery. Sagent KK shall furnish Distributor with at
least a single master copy of the current versions of the Products as well as
United States version of the same, and shall hereafter furnish to Distributor a
single master copy (collectively "Master Copies"') of any and all improvements,
modifications, and enhancements to the Products that Sagent KK does not furnish
to its licensees as a separately priced product. Ownership of, and title to,
such master copies and all such improvements, modifications, and enhancements
thereto, and any reproductions thereof, shall at all times remain with Sagent
KK. Such improvements, modifications, and enhancements shall be distributed by
Distributor pursuant to the terms and conditions of this Agreement. All other
improvements, modifications, and enhancements to the Products, all new versions
and releases of the Products, and all new Products that are in the same product
line as the Products shall be distributed by Distributor if and only if Sagent
KK requires that Distributor distribute such software. Such distribution shall
be on the terms and conditions of this Agreement.
Sagent KK shall deliver a Master Copy of Software Products in a
suitable pack for shipment in Sagent KK's standard shipping cartons to
Distributor in time for official release date of each version of the Products.
11
Manuals delivered pursuant to the terms of this Agreement shall be suitably
packed for shipment in Sagent KK's standard shipping cartons, marked for
shipment to the destination specified in Distributor's Purchase Order, and
delivered to the carrier agent F.O.B. Sagent KK's facility in Tokyo, Japan, at
which time risk of loss shall pass to Distributor. Unless otherwise specified in
writing by Distributor in Distributor's purchase order, Sagent KK shall select
the carrier. All freight, insurance, and other shipping expenses, as well as
expenses for any special packing requested by Distributor and provided by Sagent
KK, shall be paid by Distributor. All shipment and freight charges shall be
deemed correct unless Sagent KK receives from Distributor, no later than fifteen
(15) days after the date of shipment, a written notice specifying the shipment,
the purchase order number, and the exact nature of the discrepancy between the
order and the shipment in number or type of Products shipped, or freight or
other charges, as the case may be. Sagent KK may cease any and all shipments of
Products until Distributor is in full performance of its obligations under
Article 6 above.
7.2 Title. Sagent KK shall retain all right, title and interest in and
to Products delivered to Distributor until Sagent KK has received all applicable
payments therefor.
7.3 Inspection; Rejection. Distributor shall inspect all Products
promptly upon receipt thereof and may reject any defective Product, provided
that Distributor shall (i) within the earlier of thirty (30) days after receipt
of such alleged defective Product or ten (10) days after discovery of such
alleged defect, notify Sagent KK of its rejection and request a Return Material
Authorization ("RMA") number, and (ii) within ten (10) days of receipt of the
RMA number from Sagent KK return such rejected Product to Sagent KK, freight
prepaid and properly insured (such freight and insurance premium being Sagent
KK's account). Products not rejected within the foregoing time periods shall be
deemed accepted by Distributor. In the event that Sagent KK determines that the
returned Product is defective and properly rejected by Distributor, Sagent KK
shall at its option, repair or replace such defective Product, or accept return
for credit of such defective Product. Sagent KK shall return to
12
Distributor, freight prepaid, all repaired or replaced Products properly
rejected by Distributor. In the event that any rejected Product is determined by
Sagent KK to not be defective or to have been modified or subjected to unusual
electrical or physical stress, misuse, abuse or unauthorized repair attributable
to Distributor, Distributor shall reimburse Sagent KK for all costs and expenses
related to the inspection, repair, if any, and return of such Product to
Distributor.
7.4 Returned Product. Distributor shall only return Products to Sagent
KK with Sagent KK's prior written approval. Any Product returned to Sagent KK by
Distributor as authorized under this Agreement shall be shipped, freight
prepaid, F.O.B. Sagent KK's address first set forth above or such other location
as Sagent KK may instruct Distributor, and shall be packed in its original
packing material. Sagent KK may refuse to accept any Product not packed and
shipped as herein provided.
8. TECHNICAL SUPPORT
8.1 Support by Distributor. Distributor shall be solely responsible for
supporting all Products distributed hereunder. Distributor shall provide
reasonable technical support to customers, including without limitation (i)
maintaining trained and competent technical and engineering support personnel
for the Products who are sufficiently knowledgeable with respect to the Products
to answer customer questions regarding the use and operation of Products, (ii)
designating a technical liaison to coordinate Distributor's technical support
provided to Customers, (iii) responding promptly to requests for technical
support from customers, and (iv) providing technical support services to address
and resolve customers' support requests with respect to the Products.
Distributor shall ensure that Distributor's technical and engineering support
personnel attend any training required by Sagent KK with respect to the
Products. Sagent KK shall make available to Distributor such training and
technical classes as necessary to comply with this Section 8.1(i).
8.1.1 Frontline Support. Distributor shall ensure that all
customer questions regarding use or operation of Products are initially
addressed to and answered by Distributor. Unless otherwise agreed in writing by
Sagent KK,
13
Distributor shall not represent to any third party that Sagent KK is
available to answer questions from any customer directly.
8.1.2 Conformance with Sagent KK Policy. Distributor will
provide prompt and effective service and repair of Products in the Territory in
accordance with Sagent KK's standard support policies then in effect.
8.1.3 Additional Responsibilities. Without limiting the
foregoing and in addition to any other obligations set forth in Sagent KK's then
current support terms and conditions, Distributor also shall be responsible for
(i) providing sufficient information to Sagent KK for Sagent KK to duplicate any
reported error in the Products; (ii) incorporating updates into the Products
promptly upon receipt thereof; (iii) reporting errors promptly in Japanese and
in writing in accordance with Sagent KK's standard support procedures; and (iv)
providing reasonable cooperation and full information to Sagent KK in the
furnishing of support for the Products.
8.2 Support by Sagent KK. Sagent KK shall use reasonable efforts to
provide to Distributor such back-up telephone or electronic-mail technical
support as Sagent KK makes generally available to its distributors other than
Distributor. Such telephone support shall be provided during Sagent KK's normal
business hours (Monday through Friday, 9:00 a.m. - 5:00 p.m.) Japanese Standard
Time, excluding Sagent KK holidays). With respect to Computer Software Products,
Sagent KK will provide support for the then-current versions of such computer
software Products, and the latest two versions thereof from then current
version. In the case of the Products, Sagent KK shall be responsible for testing
of so version upped Product.
To achieve the objectives of the foregoing, Sagent KK shall
maintain trained and competent technical and engineering support personnel for
the Products who are sufficiently knowledgeable with respect to the Products to
answer customer questions regarding the use and operation of the Products, as
well as trained and competent training personnel for the Products who are
sufficiently knowledgeable with respect to the Products to answer customer
questions regarding the use and operation of the Products.
14
Sagent KK shall furnish Distributor with the following information in a
timely manner:
a. known bug information and known bug fixes, if any;
b. information on road map of future product line;
c. technical information on improvement, modification or enhancement;
and
d. other technical information as is reasonably necessary.
In addition to the above, it is specifically understand and agreed to
that Sagent US shall furnish hot-fix as a priority matter.
9. DISCLAIMER OF WARRANTY
SAGENT KK MAKES NO WARRANTIES OR CONDITIONS, EXPRESS, STATUTORY, IMPLIED OR
OTHERWISE, AND SAGENT KK SPECIFICALLY DISCLAIMS THE IMPLIED WARRANTIES AND
CONDITIONS OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND
NONINFRINGEMENT, AND ALL OTHER IMPLIED WARRANTIES OR CONDITIONS ARISING FROM
COURSE OF DEALING, USAGE OF TRADE OR CUSTOM. NOTWITHSTANDING THE FOREGOING,
SAGENT KK DOES NOT EXCLUDE LIABILITY TO THE EXTENT THAT SUCH LIABILITY MAY NOT
BE EXCLUDED OR LIMITED BY LAW.
10. CONFIDENTIALITY AND PROPRIETARY RIGHTS
10.1 Confidentiality. Distributor acknowledges that by reason of its
relationship to Sagent KK hereunder it will have access to certain information
and materials concerning Sagent KK's business, plans, customers, technology, and
products that are confidential and of substantial value to Sagent KK, which
value would be impaired if such information were disclosed to third parties
("Confidential Information"). Distributor agrees that it will not use in any way
for its own account or
15
the account of any third party, nor disclose to any third party, any
Confidential Information revealed to it by Sagent KK. Distributor shall take
every reasonable precaution to protect the confidentiality of Confidential
Information. Upon request by Distributor, Sagent KK shall advise whether or not
it considers any particular information or materials to be confidential.
Distributor shall not publish any technical description of the Products beyond
the description published by Sagent KK. In the event of termination of this
Agreement, there shall be no use or disclosure by Distributor of any
Confidential Information of Sagent KK, and Distributor shall not reproduce,
manufacture, have reproduced or have manufactured any computer software
programs, devices, components or assemblies utilizing any of Sagent KK's
confidential information. The foregoing confidentiality obligation shall cease
after two years of at any termination of this Agreement for whatever reason
therefor.
10.2 Proprietary Rights. Distributor agrees that Sagent KK retains all
of its right, title and interest in and to all patents, trademarks, trade names,
inventions, copyrights, know-how and trade secrets relating to the Products or
the product lines that include the Products, and the design, manufacture,
operation or service of the Products. The use by Distributor of any of these
property rights is authorized only for the purposes herein set forth and upon
termination of this Agreement for any reason such authorization will cease.
Distributor shall not (and shall require that its customers do not) remove,
alter, cover or obfuscate any copyright notices or other proprietary rights
notices placed or embedded by Sagent KK on or in any Product.
11. INTELLECTUAL PROPERTY INDEMNIFICATION
11.1 Limited Indemnity. Distributor agrees that Sagent KK has the right
to defend, or at its option to settle, and Sagent KK agrees, at its own expense,
to defend or at its option to settle, any third party claim, suit or proceeding
(collectively, "Action") brought against Distributor alleging the Products
infringe any U.S.A. or Japanese patent, copyright or trademark in existence as
of the Effective Date or comes into existence during the term of this Agreement,
subject to the limitations hereinafter set forth. Sagent KK shall have sole
control of any such Action or settlement negotiations, and Sagent KK agrees to
pay, subject to the limitation hereinafter set
16
forth, any final judgment entered against Distributor on such issue in any such
Action defended by Sagent KK. Distributor agrees that Sagent KK will be relieved
of the foregoing obligations unless Distributor notifies Sagent KK in writing of
such Action within five (5) days after becoming aware of such action, gives
Sagent KK authority to proceed as contemplated herein, and gives Sagent KK
proper and full information and assistance to settle and/or defend any such
Action. If it is adjudicatively determined, or if Sagent KK believes, that the
Products, or any part thereof, infringe any patent, copyright or trademark, or
if the sale or use of the Products, or any part thereof, is, as a result,
enjoined, then Sagent KK may, at its election, option, and expense: (i) procure
for Distributor the right under such copyright or trademark to sell or use, as
appropriate, the Products or such part thereof; (ii) replace the Products, or
part thereof, with other non-infringing suitable products or parts; (iii)
suitably modify the Products or part thereof; or (iv) remove the Products, or
part thereof, terminate distribution or sale thereof and refund the payments
paid by Distributor for such Products less a reasonable amount for use and
damage. Sagent KK shall not be liable for any costs or expenses incurred without
its prior written authorization, or for any installation costs of any replaced
Products.
11.2 Limitations. Notwithstanding the provisions of Section 11.1 above,
Sagent KK assumes no liability for infringement claims arising from (i)
combination of the Products or portions thereof with other software not provided
by Sagent KK if such infringement would not have occurred but for such
combination, or (ii) the modification of the Products or portions thereof unless
such modification was made or authorized by Sagent KK, when such infringement
would not have occurred but for such modification.
11.3 Disclaimer. SAGENT KK'S LIABILITY ARISING OUT OF OR RELATING TO
THIS ARTICLE 11 SHALL NOT EXCEED THE AGGREGATE AMOUNTS PAID BY DISTRIBUTOR TO
SAGENT KK FOR THE ALLEGEDLY INFRINGING PRODUCTS THAT ARE THE SUBJECT OF THE
INFRINGEMENT CLAIM. THE FOREGOING PROVISIONS OF THIS ARTICLE 11 STATE THE ENTIRE
LIABILITY AND OBLIGATION OF SAGENT KK AND THE EXCLUSIVE REMEDY OF DISTRIBUTOR
WITH RESPECT TO ANY ALLEGED
17
INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS BY THE PRODUCTS OR ANY PART
THEREOF.
12. LIMITATION OF LIABILITY
IN NO EVENT SHALL SAGENT KK'S LIABILITY ARISING OUT OF OR RELATING TO THIS
AGREEMENT EXCEED THE AGGREGATE AMOUNTS PAID BY DISTRIBUTOR TO SAGENT KK
HEREUNDER, INCLUDING BUT NOT LIMITED TO LIABILITY UNDER ARTICLE 11 ABOVE. IN NO
EVENT SHALL EITHER PARTY BE LIABLE FOR LOST PROFITS, COST OF PROCUREMENT OF
SUBSTITUTE GOODS, OR ANY OTHER SPECIAL, RELIANCE, INCIDENTAL, OR CONSEQUENTIAL
DAMAGES, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY WHETHER BASED IN
CONTRACT, TORT (INCLUDING NEGLIGENCE), PRODUCTS LIABILITY, OR OTHERWISE. THE
FOREGOING LIMITATIONS SHALL APPLY REGARDLESS OF WHETHER SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING THE FAILURE OF
ESSENTIAL PURPOSE OF ANY LIMITED REMEDY STATED HEREIN.
13. TERM AND TERMINATION
13.1 Term. Unless earlier terminated pursuant to Section 13.2 below or
by mutual written consent, this Agreement shall commence upon the Effective Date
and continue in full force and effect for an initial term expiring on the date
(the "Expiration Date") which is two years after the date ("Acceptance Date")
when Distributor notifies Sagent KK in writing of its acceptance of the
Japanese. This Agreement automatically shall be extended for additional one (1)
year terms unless either party notifies the other in writing of its intent to
terminate this Agreement at least three (3) months prior to Expiration Date or
its anniversary, provided, however, the quarterly guaranteed minimum revenue
stipulated in Exhibit C is agreed upon by Sagent KK and Distributor on or prior
to Expiration Date or its anniversary. The forgoing shall apply in mutatis
mutandis for so extended term.
18
13.2 Termination. This Agreement may be terminated prior to the
expiration of the initial term by prior written notice to the other party as
follows:
13.2.1 By either party upon written notice of termination if
the other party breaches any material term or condition of this Agreement and
fails to cure that breach within thirty (30) days after receiving written notice
stating the nature of the breach and the non-breaching party's intent to
terminate; or
13.2.2 By either party, effective immediately, if the other
party should become the subject of any voluntary or involuntary bankruptcy,
receivership, or other insolvency proceedings or make an assignment or other
arrangement for the benefit of its creditors, or if such other party should be
nationalized or have any of its material assets expropriated; or
13.2.3 By Sagent KK, effective immediately, if there should
occur any material change in the management, ownership, control, sales
personnel, sales and marketing capability, or financial condition of
Distributor; or
13.2.4 By Sagent KK, effective immediately, if any law or
regulation should become adopted or in effect in the Territory that would
restrict Sagent KK's termination rights or otherwise invalidate any provisions
hereof; or
13.2.5 By Sagent KK, effective immediately, if Distributor
should violate the terms of Section 15.4; or
13.2.6 By Sagent KK, effective immediately, in accordance
with provisions of Sections 14.3; or
13.2.7 By Sagent KK, effective immediately, if Distributor
knowingly makes any false or untrue statements or representations to Sagent KK
herein or in the performance of its obligations hereunder.
19
13.3 Purchase Orders; No Waiver. Notwithstanding the foregoing,
Distributor shall be obligated to accept deliveries of Products for which
Purchase Orders were accepted by Sagent KK prior to the effective date of
termination. After any notice of termination has been delivered by either party
hereunder, deliveries of Product from Sagent KK to Distributor, unless otherwise
agreed by Sagent KK in its sole discretion, shall require prepayment by wire
transfer by Distributor to Sagent KK. The acceptance of any Purchase Order for
the sale of any Product to Distributor after the termination or expiration of
this Agreement shall not be construed as a renewal or extension of this
Agreement nor as a waiver of termination of this Agreement.
13.4 Rights of Parties Upon Termination or Expiration. The following
provisions shall apply on the termination or expiration of this Agreement.
13.4.1 Cessation of Sales Activities. Distributor shall cease
all sales and other activities on behalf of Sagent KK and shall return to Sagent
KK and immediately cease all use of Confidential Information previously
furnished by Sagent KK and then in Distributor's possession. Distributor shall
additionally turn over to Sagent KK Distributor's current customer mailing list
and take such action as is necessary to terminate Distributor's registration as
Sagent KK's sales representative with any governmental authority.
13.4.2 Acceleration of Amounts Owed. All indebtedness of
Distributor to Sagent KK shall become immediately due and payable without
further notice or demand, which is hereby expressly waived, and Sagent KK shall
be entitled to reimbursement for any reasonable attorneys' fees that it may
incur in collecting or enforcing payment of such obligations;
13.4.3 No Obligation to Repurchase. Sagent KK shall have no
obligation to repurchase or to credit Distributor for its inventory of Products
at the time of termination of this Agreement. Sagent KK may, at its sole option,
repurchase from Distributor, at Sagent KK's then current list prices less any
applicable then current discounts or at the net prices paid by Distributor,
whichever are lower, any or
20
all inventory of Products originally purchased by Distributor from Sagent KK and
remaining unsold by Distributor.
13.5 No Liability for Termination. Except as expressly required by law,
in the event of termination of this Agreement by either party in accordance with
any of the provisions of this Agreement, neither party shall be liable to the
other, because of such termination, for compensation, reimbursement or damages
on account of the loss of prospective profits or anticipated sales or on account
of expenditures, inventory, investments, leases or commitments in connection
with the business or goodwill of Sagent KK or Distributor. Termination shall
not, however, relieve either party of obligations incurred prior to the
termination.
13.6 Survival. Except for termination by Sagent KK pursuant to Section
13.2.1 above, Distributor may sell Products existing in its inventory as of the
effective date of termination of this Agreement for a period of ninety (90) days
after the effective date of such termination ("Wind-Down Period"). During the
Wind-Down Period, the provisions of Article 14 and Sections 2.2, and 3.7 shall
survive. In addition to the foregoing provisions, the following provisions shall
survive any termination or expiration of this Agreement: Articles 1, 9, 10 and
11 and 14, and Sections 2.4, 2.6, 5.2, 7.2, 13.4, 13.6, 15.1, 15.3 and 15.5.
14. COMPLIANCE WITH LAWS
14.1 Export Control. Any and all obligations of Sagent KK to provide the
Products, as well as any technical data, shall be subject in all respects to
such United States laws and regulations as will from time to time govern the
license and delivery of technology and products abroad by persons subject to the
jurisdiction of the United States, including the Export Administration Act of
1979, as amended, any successor legislation, and the Export Administration
Regulations issued by the U.S. Department of Commerce, Bureau of Export
Administration. Distributor represents and warrants that it will not export or
re-export the Products or technical data related thereto except in conformity
with such laws and regulations.
21
14.1.1 Required Authorization. Distributor agrees that, unless
prior written authorization is obtained from the Bureau of Export
Administration, or the Export Administration Regulations explicitly permit the
export, re-export, and/or transshipment of the Products or technical data
disclosed or provided to Distributor, as applicable, without such written
authorization, Distributor shall not export, re-export, or transship, directly
or indirectly, the Products or technical data, to country groups S or Z (as
defined in the Export Administration Regulations), which currently consist Cuba
and North Korea, or to Iran, Iraq or Yugoslavia (Serbia and Montenegro), or to
any other country as to which the U.S. Government has placed an embargo against
the shipment of products, which embargo is in effect during the term of this
Agreement.
14.1.2 Prohibited Customers. Distributor further agrees not to
resell Products to any organization, public or private, which engages in the
research or production of military devices, armaments, or any instruments of
warfare, including biological, chemical and nuclear warfare.
14.2 Liability of Sagent KK. The provisions of this Agreement under
which the liability of Sagent KK is excluded or limited shall not apply to the
extent that such exclusions or limitations are declared illegal or void under
the laws applicable in the countries in which Products are sold hereunder.
14.3 Questionable Payments. Distributor certifies that neither it, nor
any of its directors, officers, employees, or agents is an official, agent, or
employee of any government or governmental agency or political party or a
candidate for any political office on the date of this Agreement. Distributor
shall promptly notify Sagent KK of the any event that would or may result in an
exception to the foregoing representation. Distributor shall not, directly or
indirectly, in the name of, on behalf of, or for the benefit of Sagent KK offer,
promise to pay, or pay any compensation, or give anything of value to, any
official, agent, or employee of any government or governmental agency, or to any
political party or officer, employee, or agent thereof. Distributor shall
require each of its directors, officers, employees, and agents to comply with
the provisions of this Section 14.3. Any breach of the provisions of this
22
Section 14.3 shall entitle Sagent KK to terminate this Agreement effective
immediately upon written notice to Distributor pursuant to Section 13.2 above.
14.4 Import Licenses; Exchange Controls; Other Governmental Approvals.
Distributor represents and warrants that it shall, at its expense, obtain any
and all import licenses and governmental approvals that may be necessary to
permit the sale by Sagent KK and the purchase by Distributor of the Products,
comply with all registration requirements in the Territory, obtain such
approvals from the banking and other governmental authorities of the Territory
as may be necessary to guarantee payment of all amounts due hereunder to Sagent
KK in U.S. dollars, and comply with any and all governmental laws, regulations,
and orders that may be applicable to Distributor by reason of its execution of
this Agreement, including but not limited to any requirement to be registered as
Sagent KK's independent distributor with any governmental authority, and
including but not limited to any and all laws, regulations, or orders that
govern or affect the ordering, export, shipment, import, sale (including
government procurement), delivery, or redelivery of the Products in the
Territory. Distributor shall furnish Sagent KK with such documentation as Sagent
KK may request to confirm Distributor's compliance with this Section 14.4 and
agrees that it shall not engage in any course of conduct that, in Sagent KK's
reasonable belief, would cause Sagent KK to be in violation of the laws of any
jurisdiction.
14.5 Review by Fair Trade Commission. Distributor agrees to file this
Agreement, if required, with the Japan Fair Trade Commission (the "JFTC").
Distributor shall provide Sagent KK with English language translations of all
notifications filed in connection with this Agreement promptly after such
filing. If the JFTC advises or recommends the amendment or deletion of any terms
and conditions of, or any addition to, this Agreement pursuant to the Law
Relating to Prohibition of Private Monopoly and Methods of Preserving Fair Trade
of Japan and the guidelines promulgated thereunder, Distributor shall
immediately inform Sagent KK of such advice or recommendation and the parties
shall negotiate in good faith to modify this Agreement in accordance with such
advice or recommendation. If the parties do not
23
reach agreement within thirty (30) days, either party may terminate this
Agreement without incurring any further liability or obligation.
14.6 Local Law. Distributor will notify Sagent KK of the existence and
content of any mandatory provision of law in the Territory or any other
applicable law that conflicts with any provision of this Agreement at the time
of its execution or thereafter.
15. MISCELLANEOUS PROVISIONS
15.1 Governing Law. This Agreement shall be governed by and construed
under the law of Japan.
15.2 Jurisdiction; Venue. Except as set forth in Section 15.3 below,
with respect to any disputes arising out of or related to this Agreement, the
parties consent to the exclusive personal jurisdiction of, and venue in, the
District Court of Tokyo, Japan.
15.3 Arbitration. Any dispute in which less than S200,000 is a issue and
no proprietary rights of Sagent KK are at issue shall be submitted to binding
arbitration in English, in Tokyo if initiated by Distributor or in Japanese in
Tokyo if initiated by Sagent KK, under Commercial Arbitration Rules of the
International Chamber of Commerce as then in effect. Three (3) arbitrators will
hear the dispute. Each party, within thirty (30) days after receipt of a written
demand for arbitration, will choose an impartial, independent arbitrator having
knowledge of and experience in dealing with the international computer industry,
and the arbitrators so chosen will choose the third and presiding arbitrator,
who will be an attorney at law. The award rendered by the arbitrators will be
final and binding and maybe enforced by any court of competent jurisdiction,
whether or not either party fails or refuses to participate in the arbitration.
24
15.4 Assignment. Distributor may not transfer or assign any of its
rights or obligations under this Agreement without the prior written consent of
Sagent KK. Sagent KK may freely transfer or assign its rights or obligations
under this Agreement without the prior written consent of Distributor, provided,
however, Sagent KK shall guarantee the transferee's or assignee's strict
compliance of any and all terms and conditions hereunder if such transferee or
assignee is an Affiliate, as hereinafter defined, of Sagent KK after such
transfer or assignment, and Sagent KK shall use its best efforts to inform any
transferee or assignee of their obligations after such transfer or assignment if
such transferee or assignee is not an Affiliate after such assignment. Subject
to the foregoing, this Agreement will be binding upon and inure to the benefit
of the parties hereto, their successors and assigns. As used herein, an
"Affiliate" of a company shall mean any business entity which Controls, is
Controlled by, or is under common Control with Sagent KK. As used herein,
"Control" shall mean the ownership of fifty percent (50%) or more of the voting
shares of the subject entity entitled to vote in the election of directors (or,
in the case of an entity that is not a corporation, for the election of the
corresponding managing authority).
15.5 No Implied Waivers. The failure of either party at any time to
require performance by the other of any provision hereof shall not affect the
right of such party to require performance at any time thereafter, nor shall the
waiver of either party of a breach of any provision hereof be taken or held to
be a waiver of a provision itself.
15.6 Severability. If any provision of this Agreement is held to be
invalid by a court of competent jurisdiction, then the remaining provisions will
nevertheless remain in full force and effect. The parties agree to renegotiate
in good faith those provisions so held to be invalid to be valid, enforceable
provisions which provisions shall reflect as closely as possible the original
intent of the parties, and further agree to be bound by the mutually agreed
substitute provision.
15.7 Force Majeure. Except for payment of moneys, neither party shall be
liable for failure to fulfill its obligations under this Agreement or any
purchase
25
order issued hereunder or for delays in delivery due to causes beyond its
reasonable control, including, but not limited to, acts of God, man-made or
natural disasters, earthquakes, fire, riots, flood, material shortages, strikes,
delays in transportation or inability to obtain labor or materials through its
regular sources. The time for performance of any such obligation shall be
extended for the time period lost by reason of the delay.
15.8 Conflicting Terms. The parties agree that the terms and conditions
of this Agreement shall prevail, notwithstanding contrary or additional terms,
in any purchase order, sales acknowledgment, confirmation or any other document
issued by either party effecting the purchase and/or sale of Products.
15.9 Headings. Headings of paragraphs herein are inserted for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
15.10 Notice. Any notice required or permitted to be given under this
Agreement shall be delivered (a) by hand, (b) by registered or certified mail,
postage prepaid, return receipt requested, to the address of the other party
first set forth above, or to such other address as a party may designate by
written notice in accordance with this Section 15.10, (c) by overnight courier,
or (d) by fax with confirming letter mailed under the conditions described in
(b) above. Notice so given shall be deemed effective when received, or if not
received by reason of fault of addressee, when delivered.
15.11 Language. This Agreement is in the English language only, which
language shall be controlling in all respects, and all versions of this
Agreement in any other language shall not be binding on the parties hereto. All
communications and notices to be made or given pursuant to this Agreement shall
be in the English language.
15.12 Entire Agreement. This Agreement contains the entire understanding
of the parties with respect to the subject matter hereof and supersedes all
prior agreements relating thereto, written or oral, between the parties.
Amendments to this
26
Agreement must be in writing, signed by the duly authorized
officers of the parties. The terms of any purchase order are expressly excluded.
15.13 Injunctive Relief. Distributor agrees that any violation or
threatened violation of Sections 10.1, 10.2 or 13.4.3 will cause irreparable
injury to Sagent KK, entitling Sagent KK to obtain injunctive relief in addition
to all legal remedies.
15.14 Guarantee by Sagent Technology, Inc. Sagent US, a California
corporation, having office at 0000, X. Xxxxxxxx Xx., Xxxxx 000, Xxxx Xxxx, XX
00000, U.S.A., a parent company which wholly owns Sagent KK, hereby expressly
agrees that it is jointly and severally responsible for any and all Sagent KK's
conduct and performance hereunder, compliance hereof, and any other action or
non-action required to be taken hereunder.
In Witness Whereof, the parties hereto have duly executed this Agreement
effective as of the Effective Date.
Sagent KK: Distributor:
Sagent Technology, Inc. Kawasaki Steel Systems R&D Corporation
By: /s/ XXX XXXXXXX By: /s/ XXXXXXX XXXXXXXXX
----------------------- -----------------------------------
Name: Xxx Xxxxxxx Name: Xxxxxxx Xxxxxxxxx
Title: Chairman and CEO Title: President & Director
27
EXHIBIT A
PRODUCT LISTING
Sagent KK Technology, Inc. Entire Product Line
US based Price list attached
Sagent Data Mart Suite Version 3.0 (US Version) (December 1997)
Sagent Data Mart Suite Version 3.0J (Japanese Version) (February 1998)
28
EXHIBIT B
DISCOUNTS TO LIST PRICES
[*]% Discount off US List Price for all products sold:
In the case of exercise Option:
[*]% Discount off US List Price for all products sold:
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
29
EXHIBIT C
PAYMENT TERMS
TERMS OF AGREEMENT
Distributor agrees to pay the following cost to Sagent KK for the right to
distribute Sagent's products. All Payments to Sagent KK will be based on the
guaranteed minimum US Dollar values as stated in paragraph 1 & 2 below. The
actual payment amount will then be converted into Yen using the following
formula. Using the "closing" TTC exchange rate on the last payment day
proceeding the actual payment month, all US dollar values will be converted into
Yen:
# Important: This payment schedule is based on the assumption that the Japanese
Version 3.0J is released on Feb 15, 1998 with full functionality as described in
the Manuals and that KSD accepts it in two (2) weeks from its receipt.
1) First Year annual maintenance fee & Sagent KK Training Fee: $[*] USD
Second Year Annual Maintenance Fee: $[*] USD
2) (8) Quarterly minimum Guaranteed revenue:
March 30, 1998 $[*] USD
June 30, 1998 $[*] USD
September 30, 1999 $[*] USD
December 31, 1998 $[*] USD
March 30, 1999 $[*] USD
June 31, 1999 $[*] USD
September 30, 1999 $[*] USD
December 31, 1999 $[*] USD
in case of exercise of Option:
March 31, 1999 $[*] USD
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
30
June 30, 1999 $[*] USD
September 30, 1999 $[*] USD
December 31, 1999 $[*] USD
* Certain information on this page has been
omitted and filed separately with the Commission.
Confidential treatment has been requested with
respect to the omitted portions.
