EXHIBIT 10.8
Software Distribution Agreement, dated March 15, 2000
by and between Registrant and CFS Group PLC
SOFTWARE DISTRIBUTION AGREEMENT
This Software Distribution Agreement (the "Agreement"), effective as of
March 15, 2000 (the "Effective Date"), is made by and between Netsol
International, Inc., a Nevada corporation, with principal offices at 0000 Xxxxx
Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxxx 00000 ("Netsol") and CFS
Group plc, an English public limited company, with principal offices at CFS
House, Intec Business Estate, Xxxx Xxxx Xxxxxxxxxxx, Xxxxxxxxx XX00 0XX ("CFS").
Whereas CFS desires to acquire the exclusive right to market and sublicense
certain software products of Netsol and Netsol desires to grant such right to
CFS, the parties agree to the following:
1. Definitions.
1.1 Products. "Products" means the following software products owned
and/or licensed by Netsol (which Products shall be seamlessly integrated by
Netsol into one combined Product): e-POS, Proposal Management System and
Settlement Management System, including all software components included in the
Products as well as content such as executable object code, databases, storage
media (collectively, the Software), and third-party components along with
related explanatory material (the "Material").
1.2 Distribution License and "distribute". "Distribution License" means
a license granted by Netsol to CFS which gives CFS the exclusive right, under
the terms of this Agreement, to distribute the Products to third parties. The
term "distribute", as used in this Agreement, shall mean to market, advertise,
promote or grant End User Licenses.
1.3 End User License. "End User License" means a license granted by CFS
which gives a third party the right, under certain terms and conditions, to use
(i.e., execute the object code of) the Products. End User License agreements
shall be in a form mutually agreeable to Netsol and CFS.
1.4 Marketing Use License. "Marketing Use License" means a license to
use the Products solely for marketing, demonstration, and display purposes.
1.5 License Order. "License Order" means a request from CFS to Netsol
specifying a quantity of copies of the Products to be delivered on a certain
date.
1.6 Customer. "Customer" means any individual, legal, or commercial
entity, including any governmental authority, not affiliated with CFS, that
enters into or will enter into an End User License Agreement.
1.7 Launch Date. "Launch Date" means the date of the end of the Ramp
Period.
1.8 Price. "Price" shall have the meaning set forth in Section 6.
1.9 Ramp Period. "Ramp Period" means the period from the Effective Date
through CFS's acceptance of the Products as set forth in Section 3.
1.10 Territory. "Territory" means the whole world.
1.11 Acceptance Testing Standards. "Acceptance Testing Standards" shall
mean reasonable standards to be agreed to between the parties which shall
include, among other things, requirements (a) that CFS commence testing software
within ten (10) days of the date of notification by Netsol to CFS that the
software is complete, with such testing to be completed by CFS within forty-five
(45) days and notice given to Netsol of any problems identified (with the
software to be deemed accepted if CFS fails to meet this schedule), (b) that
Netsol use its reasonable efforts to correct any problems so identified within
45-60 days thereafter and (c) that the parties engage in successive rounds of
testing and corrections until the software is accepted (or deemed accepted) by
CFS.
2. Appointment; Product Distribution License. Subject to all of the terms and
conditions of this Agreement, Netsol hereby appoint CFS for the term of this
Agreement as the exclusive distributor of the Products, and grants to CFS, and
CFS hereby accepts from Netsol, an exclusive and non-transferable Distribution
License under which CFS may distribute the Products, including by means of
granting a sublicense pursuant to an End User Agreement, to Customers in the
Territory. CFS may, in its discretion, distribute the Products under any of its
own trademarks or tradenames reasonably acceptable to Netsol or under Netsol
Licensed Marks described in Section 5. Subject to all of the terms and
conditions of this Agreement, Netsol also grants to CFS an exclusive Marketing
Use License. Netsol represents and warrants that it owns or has the right to
license the Products. CFS shall be bound by and shall comply with all of the
terms of any third-party license agreements for third-party software that may be
included in the Software, subject to the following: no such third-party license
agreements shall impose any obligation upon CFS to pay any license or other fee
nor shall it impose any restriction on CFS' ability to use or distribute the
Software other than as identified to CFS by Netsol and accepted by CFS. From
time to time, Netsol shall update the Products and shall provide such updates to
CFS during the term of this Agreement pursuant to the terms of a Maintenance and
Support Agreement to be entered into by the parties upon mutually agreeable
terms (which shall include terms relating to source code escrows and periodic
updates). Updates of the Software and Materials shall be
deemed a part of the Software and Materials, respectively, and subject to all
of the terms and conditions set forth herein, unless otherwise specified. The
Products that CFS orders under Section 6.1 below are licensed for
distribution only, and not sold. CFS shall not be entitled to receive any
source code or source code documentation relating to any Products. Netsol
shall not grant any license, sublicense, distribution or other rights to any
other person with respect to the Products or any portion or derivative
thereof. Notwithstanding the foregoing, however, this Agreement shall not
prevent Netsol from (a) continuing DaimlerChrysler as an End User or (b) from
licensing the Products to End Users during the Ramp Period. All rights not
expressly granted to CFS hereunder are reserved by Netsol.
3. Netsol Obligations. Netsol shall use reasonable efforts to (i) support CFS's
activities in marketing the Products to prospective Customers, including but not
limited to, making available to CFS Product sales and technical training,
marketing materials, and Marketing Use Licenses materials; and (ii) fill
promptly orders for Products that CFS submits to Netsol in accordance with
Section 6.1 below.
Commencing at the Effective Date, Netsol shall use reasonable efforts
to complete the development of the Products, including all additional things
necessary to provide core functionality for use by End Users Licensees in the
United States and Europe ("gap fillers"), including, without limitation, (a)
value added tax and other tax systems, and (b) any other core functions
reasonably requested by CFS or by the Reference Sites (as defined below), all in
accordance with the following schedule: (a) upon receipt from CFS of a list of
needed gap fillers it has identified during the first sixty (60) days from the
Effective Date (the "gap list delivery date"), Netsol shall respond in writing
within fourteen (14) days with its schedule for completion of the implementation
of such gap fillers into the Software, identifying those gap fillers that can be
completed within an additional four months from the gap list delivery date (the
end of the four months is referred to as the "Deadline" and the gap fillers so
identified are the "accepted gap fillers") and those gap fillers that cannot be
completed within that time period; (b) in the event that there are gap fillers
which Netsol cannot complete by the Deadline, CFS can at its option, terminate
this Agreement without any liability to Netsol; (c) in the event no such
termination has occurred, Netsol shall use reasonable efforts to complete the
accepted gap fillers by the Deadline; and (d) when the Products (including the
accepted gap fillers) are deemed by Netsol to be completed, Netsol shall deliver
the Products to CFS for testing and CFS shall test them, without undue delay, in
accordance with the Acceptance Testing Standards and accept the Products when it
is reasonably satisfied that they are complete.
In the event that the date of such acceptance shall not occur on or
before the Deadline, CFS may, at its option, terminate this Agreement and
recover certain expenses: its reasonable costs (documented to Netsol's
reasonable satisfaction) (but not in excess of $200,000) involved in preparing
for the distribution of the Products, including without limitation, costs of
travel, amounts paid to Netsol hereunder, marketing materials and training
costs.
In the event the date of such acceptance is on or before the Deadline
(or afterwards, in the event CFS does not so terminate this Agreement), in which
case the date of acceptance shall be the end date of the Ramp Period (provided,
however, that CFS, at its sole discretion, may end the Ramp Period at any
earlier time).
In addition, during the Ramp Period, Netsol shall, at its expense (a)
train CFS personnel to perform end user training (out-of-pocket expenses
therefore shall be borne by CFS), and (b) provide adequate system and user
documentation work with CFS to produce manuals. During the term of this
Agreement (except during the Ramp Period), Netsol shall refer all inquiries from
prospective end users regarding the Products to CFS and shall not license or
attempt to license Software to any CFS customer.
At no charge to CFS other than as set forth in Section 6.2, Netsol
shall provide the support and maintenance services pursuant to the Maintenance
and Support Agreement.
For the period commencing with the date of this Agreement through the
date two (2) years after the termination or expiration of this Agreement, Netsol
shall not develop, modify, sell, produce or license, or provide consulting or
programming services regarding, or engage in any other business activity with,
any product other than the Product (it being agreed, however, that Netsol may
continue its present relationship with DaimlerChrysler and may continue to
distribute the Product to End Users during the Ramp Period as set forth in
Section 2) which (a) competes with any Product or involves asset based leases or
the management thereof, or (b) which competes with any product of CFS to which
Netsol has devoted any efforts pursuant to the Master Development services
Agreement of even date herewith between the parties.
4. CFS's Obligations.
4.1 CFS shall use reasonable efforts to display, demonstrate, and
successfully market the Products to prospective Customers, to secure orders for
the Products, and to promptly handle inquiries and orders by Customers. In its
distribution efforts, CFS shall use reasonable efforts to comply with good
business practices and all laws and regulations relevant to this Agreement of
the subject matter hereof. CFS shall not imply that it is, or is part of,
Netsol. CFS covenants to Netsol that all advertising and promotional materials
that CFS develops in connection with the Products shall not violate any laws or
any rights of any third parties, including, but not limited to, such violations
as infringement or misappropriation of any copyright, patent, trademark, trade
secret, music, image, or other property or proprietary right, false advertising,
unfair competition, defamation, invasion of privacy or rights of celebrity,
violation of any anti-discrimination law or regulation, or any other right of
any person or entity. CFS shall provide support and maintenance services as
required by the Maintenance and Support Agreement. CFS shall use reasonable
efforts to identify gap fillers required to complete the Products during the
Ramp Period, including,
without limitation, implementing the Reference Sites and obtaining input from
them within sixty (60) days of their installation.
4.2 By the fifteenth (15th) business day of each calendar quarter, CFS
shall provide to Netsol a forecast of the expected volume of License Orders to
be submitted to Netsol for that quarter. This estimate is not binding or to be
relied upon by Netsol for any purpose.
4.3 CFS shall use reasonable efforts to promptly report to Netsol all
information it develops or receives regarding technical problems with the
Products. CFS may, at its discretion, report to Netsol modifications, designs
changes or improvements to the Products suggested by any person.
4.4 CFS shall not knowingly fail to comply with the U.S. Foreign
Corrupt Practices Act or any applicable export laws, restrictions, or
regulations of the United States or other countries located within the Territory
and shall not knowingly export or re-export, or allow the export or re-export,
of any Products, technology, or information (including, but not limited to,
Proprietary Information), or any direct or indirect product thereof, that CFS
obtains or learns under this Agreement in violation of any such laws,
restrictions, or regulation, or to any country subject to embargo under the laws
of the United States or any country within the Territory.
5. Trademark License. Netsol and one or more affiliated companies (individually
or collectively, as the case may be, but referred to as the "Licensors") hereby
grant and CFS hereby accepts, a personal, non-exclusive, non-transferable and
non-assignable license to CFS to use the certain trademarks and service marks
owned by the Licensors identified as such in writing to CFS by Netsol (as
expanded by Netsol after the date hereof) (collectively, the "Licensed Marks"),
during the term of the Agreement solely for the advertising, marketing and
promotion of the Products. The Software shall contain Netsol-designed screen
giving development credit to Netsol. CFS shall use the Licensed Marks only in a
manner that complies with the Agreement and the minimum specifications set forth
by Netsol as amended from time to time. CFS shall not use the Licensed Marks in
connection with the offer, sale, advertising, marketing or promotion of any
goods, services or other activities other than in connection with the Products.
CFS hereby accepts that Licensors own all right, title and interest in and to
the Licensed Marks and all goodwill attached or which shall become attached
thereto, excepting CFS's limited right to use the Licensed Marks pursuant to the
license herein granted. CFS may not use the Licensed Marks as part of any domain
name. CFS shall not at any time do or cause or suffer to be done any act or
thing in any way impairing or tending to impair Licensors' right, title and
interest in and to the Licensed Marks. All rights in the Licensed Marks arising
from the use thereof by CFS shall inure to the benefit of Licensors and
Licensors shall have the exclusive right to register or deal with the same. CFS
shall not represent in any manner that it has any ownership interest in the
Licensed Marks, and CFS accepts that use of the Licensed Marks shall not create
in its favor any right, title
or interest in or to the Licensed Marks. CFS shall promptly inform Netsol of
any use or infringement by a third party of the Licensed Marks.
6. Order Terms and Conditions.
6.1 Orders. CFS shall order copies of the Products from Netsol by
submitting a purchase order that includes on its face the following statement,
"This order is made pursuant to the Software Distribution Agreement with Netsol.
No other terms or conditions apply unless accepted in advance in writing by
Netsol."
6.2 Pricing and Payment. CFS shall pay a license fee to Netsol equal to
fifty percent (50%) of the amounts actually collected from customers for (a) End
User Licenses (proved, however, that in the event that the End User License is
sold in connection with an end user license for CFS' Credit Line Lease Manager
the applicable percentage shall be twenty-five percent (25%) of the license fee
for those combined products), net of shipping charges, sales, excise, use, value
added or other taxes, tariffs, duties or fees (including customs duties and
broker charges) and net of any other amounts charged for ancillary products or
services (the net amount is referred to as the "Price"), (b) support and
maintenance services relating to the End User License, (c) customization of the
Software performed by Netsol (but the amount paid to Netsol for customization
shall be a minimum of not less than $300 per person-day). CFS shall be entitled
to reimbursement for amounts paid to Netsol in accordance with this Section to
the extent of fifty percent (50%) of any Customer refund made by CFS with
respect to claims relating to Product performance.
CFS shall not be required to make any payment to Netsol for revenue CFS
receives from implementation of the Products in customer sites, except to the
extent it involves Netsol in such implementation activities, and, in such case,
only as agreed to by the parties. CFS shall pay Netsol a minimum of $1.2 million
pursuant to this Section (whether or not Customer receipts are sufficient to
require such payment) during the period beginning on the Effective Date and
ending on the date 12 months after the Launch Date, inclusive of all amounts
paid hereunder, whether or not CFS has sold enough Products to require payment
in such amounts. To the extent of a shortfall in such payments, CFS shall pay
the amount of such shortfall at the end of such period to Netsol (but for
purposes of such calculation, CFS shall be allowed to count as paid to Netsol,
the applicable percentage of all accounts receivable CFS has accrued for
Products delivered during the period, even if not collected by the last day of
the Period, so long as Netsol's share of such accounts receivable are eventually
paid within 90 days of the applicable due dates on the payments schedule
originally set up with the applicable Customer. No payments to Netsol will be
owed by CFS with respect to two End User Licenses granted (with Netsol's
consent, which shall not be unreasonably withheld or delayed) at no cost to one
end user in the United States and to one end user in Europe (collectively, the
"Reference Sites").
In the event CFS desires to offer the Products to Customers on a basis
in which the Customers would pay for the Product based on per-usage charges
(such as ASR), the parties will negotiate in good faith to determine an
appropriate license fee for such arrangement. The parties intend to negotiate
the fee within forty-five (45) days of the date hereof.
6.3 Payment. CFS will promptly inform Netsol of (a) the relevant terms
of End User License sales and (b) receipt by CFS of payments from Customers as
to which Netsol is entitled to be paid any amount pursuant to Section 6.2. CFS
shall make full payment to Netsol within thirty (30) days of the date of receipt
by CFS of payment from its customer. Netsol's invoices shall reflect estimated
due dates based on the assumption that the Customer will pay CFS consistent with
the terms of the relevant End User License. All payments and transactions shall
be in United States dollars. Overdue payments shall be charged interest at a
rate of one-and-a-half percent (1.5%) per month, compounded monthly, or at the
maximum rate allowed by law, whichever is less.
6.4 Audit Rights. Netsol shall have the right, at reasonable intervals,
to audit the books and records of CFS to the minimum extent reasonably necessary
to establish that the amounts reported to it under this Agreement are correct.
7. Limited Warranty; DISCLAIMER. Netsol warrants that the Software media shall
function properly for a period of sixty (60) days following the date of delivery
of the Software to CFS. OTHERWISE THE PRODUCTS AND ALL ACCOMPANYING MATERIALS
ARE PROVIDED "AS IS", AND NETSOL MAKES NO WARRANTY, WHETHER STATUTORY, EXPRESS
OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, TITLE, OR NONINFRINGEMENT, OR ANY WARRANTY
ARISING FROM COURSE OF DEALING, PERFORMANCE, CUSTOM AND USAGE IN THE TRADE.
NETSOL'S LIABILITY FOR DEATH OR PERSONAL INJURY ARISING OUT OF ITS NEGLIGENCE
SHALL NOT BE LIMITED. NETSOL SHALL HAVE NO LIABILITY RELATING TO THE PERFORMANCE
OF THE SOFTWARE UNDER ANY THEORY AT LAW, IN EQUITY, OR OTHERWISE, INCLUDING, BUT
NOT LIMITED TO, CONTRACT, TORT, NEGLIGENCE AND STRICT LIABILITY, FOR ANY LOSS OR
DAMAGES, INCLUDING, BUT NOT LIMITED TO, SPECIAL, EXEMPLARY, PUNITIVE,
INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, AND AMOUNTS FOR LOSS OF USE,
COMPUTER MALFUNCTION, LOST PROFITS, LOSS OF INFORMATION, BUSINESS INTERRUPTION,
AND COSTS OF COVER, EVEN IF NETSOL HAS BEEN ADVISED OF SAME. NO REPRESENTATION
REGARDING PERFORMANCE OF THE SOFTWARE MADE ORALLY OR BY CONDUCT SHALL CONSTITUTE
A WARRANTY BY OR OTHERWISE BE EFFECTIVE AGAINST OR BINDING UPON NETSOL.
8. LIMITED LIABILITY. NETSOL SHALL NOT BE LIABLE FOR SPECIAL, EXEMPLARY,
PUNITIVE, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES (EVEN IF NETSOL HAS BEEN
ADVISED OF SAME) AND AMOUNTS FOR LOSS OF USE, COMPUTER MALFUNCTION, LOST
PROFITS, LOSS OF INFORMATION, BUSINESS INTERRUPTION OR COSTS OF COVER, ARISING
OUT OF, IN CONNECTION WITH, OR RESULTING FROM, THE USE OF OR PERFORMANCE OF THE
SOFTWARE AND MATERIALS. THE ENTIRE LIABILITY OF NETSOL FOR ANY LOSS OR DAMAGES
ON A CLAIM OF ANY KIND RELATING TO THE PERFORMANCE OF THE SOFTWARE UNDER ANY
THEORY AT LAW, IN EQUITY OR OTHERWISE, INCLUDING, BUT NOT LIMITED TO, CONTRACT,
TORT, NEGLIGENCE AND STRICT LIABILITY SHALL NOT IN ANY EVENT EXCEED THE SUM OF
ALL PAYMENTS ACTUALLY MADE BY CFS TO NETSOL PURSUANT TO THIS AGREEMENT. ANY
ACTION AGAINST NETSOL RELATING TO THE PERFORMANCE OF THE SOFTWARE MUST BE
BROUGHT WITHIN ONE (1) YEAR AFTER THE CLAIM AROSE.
Notwithstanding the provisions of Sections 7 and 8 above, Netsol shall
be liable to CFS with respect to refunds or credits to made by CFS to Customers
with respect to claims that the Products did not perform in accordance with
their specifications.
9. Ownership. Netsol represents and warrants that it is the sole owner (free and
clear of any and all liens, encumbrances, claims or rights of others) of all
right, title and interest in and to the Products and all literature associated
therewith, including all copyright rights, patent rights, trademark rights,
know-how, trade secrets, and related intellectual property, intangible and
proprietary rights throughout the world (collectively, the "Owned Assets"). CFS
shall not at any time do or cause or suffer to be done any act or thing
contesting or in any way impairing or tending to impair the value of or Netsol's
right, title and interest in and to any of the Owned Assets. Each party
represents and warrants that none of the execution, delivery, or performance of
this Agreement or the consummation of the transactions contemplated by this
Agreement does or will conflict with, or result in any violation or breach of,
or constitute a default under, any provision of any agreement to which it is a
party.
10. Proprietary Information.
10.1 Pursuant to the Agreement, a party (the "disclosing party") may
disclose to the other party (the "recipient party") proprietary technical, trade
secret, financial, business, sales, or marketing sensitive information
(collectively, "Proprietary Information"). In the event of such disclosure,
Netsol and CFS agree to protect the other party's Proprietary Information with
the same care as it utilizes to protect its own Proprietary Information, and to
not disclose the Proprietary Information to any third party for the term of this
Agreement and a period of two (2) years following the termination or expiration
of this Agreement. Information that the recipient party can demonstrate is
within one of the following exceptions shall not be considered to be
Proprietary Information: (a) information known by the recipient party prior
to the execution of this Agreement without an obligation of confidentiality
other than under this Agreement; (b) information obtained from any person not
in breach of any obligation to the disclosing party, or (c) information
publicly known or in the public domain or becomes publicly known through no
unauthorized act of the recipient party
10.2 CFS acknowledges that the Products are a valuable proprietary
asset of Netsol and contain important trade secrets of Netsol. Except as
expressly and unambiguously permitted under this Agreement, and except as
strictly permitted under law (but, in such situation, after a request having
been made to Netsol), CFS shall not, and shall not allow others to, (i)
decompile, reverse engineer, disassemble, trace or otherwise analyze the
Products, their content, operation, or functionality; or (ii) transfer, license,
rent, lease, loan, modify, adapt, or translate the Products, nor create
derivative works based on the Products.
11. Legal Notices. Each party shall immediately advise the other in writing of
any legal notices served which might affect Netsol or any of the Products.
12. Cooperation; Public Announcement. Each party will reasonably assist and
cooperate with the other party's technical personnel, accountants, and service
and sales personnel upon request. Neither party shall make any Public
Announcement mentioning the other party or this Agreement or the terms hereof
without the written consent of such other party, unless required by law or by
the applicable regulations of a securities exchange. In the event any party
concludes that it is required by law to make such a Public Announcement, it
shall use its best efforts to consult with the other party as to the content of
such Public Announcement, and give reasonable consideration to such other
party's suggestions prior to making such Public Announcement. "Public
Announcement" shall mean any public announcement, including any publicly
accessible filing with a government or regulatory agency, advertisement, or
publication or release for publication of any statement.
13. Costs and Expenses. Each party shall be solely responsible for all of its
costs, salaries and other expenses incurred in connection with the performance
of its obligations hereunder, and the other party shall have no liability,
obligation or responsibility therefor, unless otherwise agreed upon in writing
by the parties or as otherwise indicated in Section 3 of this Agreement.
14. Term. The Agreement shall commence on the Effective Date and shall remain in
effect for three years. This Agreement may be extended for an additional term of
three years by CFS by written notice to Netsol at any time prior to: (i) its
termination; and (ii) ninety (90) days before the date of the expiration of the
initial term or of any subsequent term. Upon expiration of the Agreement, CFS
shall have no further right to distribute Products, but then- existing End User
Licenses shall not be affected.
15. Termination. CFS acknowledges and agrees that, following the expiration or
earlier termination of this Agreement, CFS shall not have any right whatsoever
to continue as a distributor or otherwise to distribute any Products, regardless
of any undocumented continuation of the relationship with Netsol. Upon
termination, CFS shall return or destroy any copies it has of the Software.
Netsol and CFS acknowledge and agree that the rights of termination under this
Agreement are absolute and that it has no rights to a continued relationship
with the other except as expressly stated herein. Neither party shall incur any
liability whatsoever for any damage, loss, or expenses of any kind suffered or
incurred by the other (or for any compensation to the other) arising from or
incident to any termination of this Agreement by such party that complies with
the terms of this Agreement, whether or not such party is aware of any such
damage, loss, or expenses. If this Agreement is terminated for any reason,
Netsol may elect to continue or terminate any order for Products then pending.
Termination is not the sole remedy under this Agreement and, whether or not a
party terminates this Agreement, all other remedies shall remain available to
such party. The Agreement may be terminated for any of the following reasons:
15.1 Default or Failure to Complete Product or Failure to Perform. Upon
the failure or neglect of either party to comply materially with any of the
terms and provisions of the Agreement, and the same is not corrected by the
defaulting party within thirty (30) days of the party's receipt of a written
notice from the other party that the same be corrected, the non-defaulting party
may terminate the Agreement upon thirty (30) days' written notice. Such notice
shall be deemed to be effective only if it contains the following sentences in
all capital letters: "THIS IS A FORMAL NOTICE OF A BREACH OF CONTRACT. FAILURE
TO CURE SUCH BREACH WILL HAVE SIGNIFICANT LEGAL CONSEQUENCES." In addition, CFS
shall have the right to terminate this Agreement in the event that the Products
fail to meet industry standards for minimum performance. In the event of a
termination pursuant to the preceding sentence, no payment with respect to any
shortfall shall be due by CFS to Netsol.
15.2 Insolvency. In the event that either party be adjudged insolvent
or bankrupt, or upon the institution of any proceedings by it seeking relief,
reorganization or arrangement under any laws relating to insolvency or
bankruptcy, or upon any assignment for the benefit of creditors, or upon the
appointment of a receiver, liquidator or trustee of any of its property or
assets, or upon the liquidation, dissolution or winding up of its business, the
Agreement may be terminated or canceled by the other party upon giving written
notice thereof, and upon the giving of such notice the Agreement shall terminate
immediately.
16. Indemnity Obligations.
16.1 Each Party's Obligations. Each party shall be solely responsible
for all investments made or expenses incurred in connection with the
establishment or operation of its business. Each party (the "indemnifying
party") will indemnify and the other party free and harmless from,
and reimburse the other party within thirty (30) days of its incurring, and
defend the other party against, any and all claims, liabilities, losses,
damages, costs and expenses (including attorneys' fees) arising from in
connection with or with respect to: (a) termination of any other agreements
as may be entered into by the indemnifying party as a result of the
termination or non-renewal of the Agreement; (b) discharge or termination of
any personnel employed directly or indirectly by the indemnifying party as a
result of the termination or non-renewal of the Agreement; (c) the assessment
of any payments, taxes or other charges payable with respect to any personnel
of the indemnifying party or any other persons, corporations or other
business entities as a result of the termination or non-renewal of the
Agreement; (d) any acts or omissions of the indemnifying party or its agents
which give rise to claims that such acts or omissions were committed by or on
behalf of the other party by the indemnifying party acting in the role of the
indemnifying party or otherwise; and (e) acts or omissions by the
indemnifying party in violation of the Agreement.
16.2 Netsol's Obligations. Netsol shall hold CFS and its officers,
directors, agents and employees harmless from all liability, damages,
settlements, attorneys' fees and expenses related to a claim of infringement or
misappropriation resulting from infringement by any Product of any patent issued
as of the date of delivery of the first copy of the applicable Product or any
copyright, provided that Netsol is promptly notified of any and all threats,
claims and proceedings related thereto and given reasonable assistance and the
opportunity to assume sole control over the defense and all negotiations for a
settlement or compromise; Netsol will not be responsible for any settlement it
does not approve in writing. THE FOREGOING IS IN LIEU OF ANY WARRANTIES OF
NONINFRINGEMENT, WHICH ARE HEREBY DISCLAIMED. The foregoing obligation of Netsol
does not apply with respect to Product or portion or component thereof (a) that
is not supplied by Netsol, (b) that is modified after shipment by Netsol, if the
alleged infringement relates to such modification, (c) that is combined with
other products, processes or materials, where the alleged infringement relates
to such combination, (d) where CFS continues allegedly infringing activity after
being notified thereof or after being informed of modifications that would have
avoided the alleged infringement, (e) where CFS's use of the Product is incident
to an infringement not resulting primarily from the Product, or (f) where CFS's
use is not strictly in accordance with this Agreement and all applicable
licenses and documentation. CFS will indemnify Netsol and its officers,
directors, agents, and employees from all damages, settlements, attorneys' fees
and expenses related to a claim of infringement or misappropriation to the
extent such claim relates to CFS' continued infringing activity after being
notified thereof or after being informed of modifications that would have
avoided the alleged infringement.
17. Miscellaneous Provisions.
17.1 Not a Joint Venture. Nothing in the Agreement shall be deemed
or construed as creating a joint venture, partnership or franchise between
Netsol and CFS. Netsol and CFS are, and at all times will continue to be,
independent contractors with respect to each other. Neither party shall have
any power or authority to bind or commit the other.
17.2 Governing Laws, Venue, and Contract Interpretation. The Agreement
shall be governed in all respects, including the validity, interpretation, and
effect, the laws of the State of California, without regard to principles of
conflicts of law. The state and federal courts in the State of New York shall
have exclusive jurisdiction over and be the exclusive venue for all matters
relating to the Agreement. Each party consents to the jurisdiction of such court
and waives any right to raise any objection to the convenience of the venue.
Each covenant or provision in the Agreement shall be independent and severable
from, and shall not affect the enforceability of, any other covenant or
provision of the Agreement; and, therefore, if any covenant or provision of the
Agreement shall be determined to be invalid or unenforceable, the remaining
covenants and provisions of the Agreement shall remain in full force and effect.
Ambiguities, inconsistencies or conflicts in the Agreement shall not be strictly
construed against the drafter of the language but will be resolved by applying
the most reasonable interpretation under the circumstances, giving full
consideration to the parties' intentions at the time the Agreement is entered
into. If any words or phrases in this Agreement or any preliminary draft of this
Agreement shall have been stricken out or otherwise eliminated, whether or not
any other words or phrases have been added, this Agreement shall be construed as
if those words or phrases were never included in this Agreement, and no
implication or inference shall be drawn from the fact that the words or phrases
were so stricken out or otherwise eliminated. Where the context of the Agreement
requires, singular terms shall be considered plural, and plural terms shall be
considered singular.
Any controversy or claim arising out of or relating to this Agreement
(including any such matter involving any parent, subsidiary, affiliate,
successor in interest, or agent of CFS or of Netsol) shall be submitted first to
voluntary mediation, and if mediation is not successful, then to binding
arbitration, in accordance with the dispute resolution procedures set forth in
Exhibit A attached hereto. Judgment on any arbitration award may be entered in
any court in the State of New York having proper jurisdiction.
17.3 Entire Understanding. This Agreement (including Appendices hereto
which are hereby incorporated herein by reference as though fully set out)
contains the entire understanding and agreement between the parties with respect
to the subject matter contained herein, supersedes all prior oral or written
understandings and agreements relating thereto and may not be altered, modified,
released, discharged or waived in whole or in part, except by a written
instrument signed by authorized representatives of the parties. No person or
other legal or commercial entity not a party hereto shall have any interest
herein or be deemed a third party beneficiary hereof.
17.4 Survival. Except as specifically set forth herein, expiration,
termination or other ending of the Agreement does not extinguish the rights and
obligations set forth in Sections 6, 10 or 16 of this Agreement and will not
free either party from its respective obligations to comply
with the terms of the Agreement which require performance subsequent to the
termination hereof.
17.5 Waiver. The failure of either party to enforce any of the
provisions hereof shall not be construed to be a waiver of the right of such
party thereafter to enforce such provisions. The failure of either party to
exercise in any respect any of the rights provided for herein shall not be
deemed a waiver of any right. The waiver of any right provided for herein shall
not be deemed a waiver of any further right hereunder.
17.6 Assignment. This Agreement shall inure to the benefit of, and be
binding upon, each party and its successors and assigns, but shall not be
assignable by any party except by operation of law, as in a merger or
consolidation, without the prior written consent of the other party. If any
party wishes to delegate the performance of any of its obligations hereunder to
a third party, the written consent of the other party must first be obtained and
each party reserves the right to approve all terms and conditions of any such
delegation. Any purported assignment or delegation by any party without the
other party's written consent shall be void and of no effect.
17.7 Headings. Headings used in the Agreement are for reference
purposes only and shall not be deemed a part of the Agreement.
17.8 Notices. All notices, reports, requests, acceptances and other
communications required or permitted under this Agreement will be in writing.
Notices will be deemed given when actually received. All communications will be
sent to the receiving party's address as set forth below or to such other
address that the receiving party may have provided for purposes of receiving
notices as provided in this Section.
To Netsol:
Netsol International, Inc.
0000 Xxxxx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Xxxxxx Xxxxxx
Attention: General Counsel
with a copy to:
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
00000 Xx Xxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Xxxxxx Xxxxxx
Attention: Xxxxxx X. Xxxxxxx, Esq.
To CFS:
CFS Group plc
CFS House
Intec Business Xxxxxx
Xxxx Xxxx Xxxxxxxxxxx
Xxxxxxxxx XX00 0XX
Xxxxxx Xxxxxxx
Attention: Company Secretary
with a copy to:
Xxxxxxx & XxXxxxxx
000 Xxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Xxxxxx Xxxxxx
Attention: Xxxxxxx X. Xxxxxx, Esq.
17.9 No Personal Liability. Each action or claim of any party arising
under or relating to this Agreement shall be made only against the other party
as a corporation, and any liability relating thereto shall be enforceable only
against the corporate assets of such party. No party shall seek to xxxxxx the
corporate veil or otherwise seek to impose any liability relating to, or arising
from, this Agreement against any shareholder, employee, officer or director of
the other party. Each of such persons is an intended beneficiary of the mutual
promises set forth in this Section and shall be entitled to enforce the
obligations of this Section.
17.10 Facsimile Delivery; Counterparts; Authority. This Agreement may
be delivered by facsimile transmission of an executed counterpart signature page
hereof, and after attachment of such transmitted signature page to a copy of
this Agreement, such copy shall have the same effect and evidentiary value as
copies delivered with original signatures. Any party delivering this Agreement
by facsimile transmission shall deliver to the other party, as soon as
practicable after such delivery, an original executed counterpart signature page
of this Agreement. This Agreement may be executed in more than one counterpart
with the same effect as if all executing parties had executed the same document.
Each such counterpart shall be deemed an original and such counterparts, taken
together, shall constitute one and the same instrument. Each individual
executing below on behalf of a party hereby personally represents and warrants
to the other party that such individual is duly authorized to so execute, and to
deliver, this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
NETSOL INTERNATIONAL, INC. CFS GROUP PLC
By: By:
/s/ Xxxxx Xxxxxx /s/ Xxxxxx Xxxxx
---------------------------------- ----------------------------
(Signature) (Signature)
Xxxxx Xxxxxx Xxxxxx Xxxxx
---------------------------------- ----------------------------
(Print Name) (Print Name)
Chief Executive Officer Executive Chairman
---------------------------------- ----------------------------
(Position) (Position)
March 10, 2000 March 10, 2000
---------------------------------- ----------------------------
(Date) (Date)
By: By:
/s/ Xxxxxx X. Xxxxxx /s/ N.G. Canderans
---------------------------------- ----------------------------
(Signature) (Signature)
Xxxxxx X. Xxxxxx N.G. Canderans
---------------------------------- ----------------------------
(Print Name) (Print Name)
President and Secretary CEO CFS Europe Ltd.
---------------------------------- ----------------------------
(Position) (Position)
March 10, 2000 March 10, 2000
---------------------------------- ----------------------------
(Date) (Date)
EXHIBIT A
DISPUTE RESOLUTION PROCEDURES
The following procedures shall be used to resolve any controversy or claim
("dispute") as provided in this Agreement. If any of these provisions are
determined to be invalid or unenforceable, the remaining provisions shall remain
in effect and binding on the parties to the fullest extent permitted by law.
Mediation
A dispute shall be submitted to mediation by written notice to the other party
or parties. In the mediation process, the parties will try to resolve their
differences voluntarily with the aid of an impartial mediator, who will attempt
to facilitate negotiations. The mediator will be selected by agreement of the
parties. If the parties cannot agree on a mediator, a mediator will be
designated by the American Arbitration Association ("AAA"). Any mediator so
designated must be acceptable to all parties.
The mediation will be conducted as specified by the mediator and agreed upon by
the parties. The parties agree to discuss their differences in good faith and to
attempt, with the assistance of the mediator, to reach an amicable resolution of
the dispute.
The mediation will be treated as a settlement discussion and therefore will be
confidential. The mediator may not testify for either party in any later
proceeding relating to the dispute. No recording or transcript shall be made of
the mediation proceedings.
Each party will bear its own costs in the mediation. The fees and expenses of
the mediator will be shared equally by the parties.
Arbitration
If a dispute has not been resolved within ninety (90) days after the written
notice beginning the mediation process (or a longer period, if the parties agree
to extend the mediation), the mediation shall terminate and the dispute will be
settled by arbitration. The arbitration will be conducted in accordance with the
procedures in this document and the International Arbitration Rules of the AAA
("AAA Rules"). In the event of a conflict, the provisions of this document will
control.
The arbitration will be conducted before a panel of three arbitrators,
regardless of the size of the dispute, to be selected as provided in the AAA
Rules. Any issue concerning the extent to which any dispute is subject to
arbitration, or concerning the applicability, interpretation, or enforceability
of these procedures, including any contention that all or part of these
procedures are invalid or unenforceable, shall be governed by the Federal
Arbitration Act and resolved by
the arbitrators. No potential arbitrator may serve on the panel unless he or
she has agreed in writing to abide and be bound by these procedures.
Unless otherwise provided in the Agreement, the arbitrators may not award
non-monetary or equitable relief of any sort. They shall have no power to award
(i) damages inconsistent with the Agreement or (ii) punitive damages or any
other damages not measured by the prevailing party's actual damages, and the
parties expressly waive their right to obtain such damages in arbitration or in
any other forum. In no event, even if any other portion of these provisions is
held to be invalid or unenforceable, shall the arbitrators have power to make an
award or impose a remedy that could not be made or imposed by a court deciding
the matter in the same jurisdiction.
No discovery will be permitted in connection with the arbitration unless it is
expressly authorized by the arbitration panel upon a showing of substantial need
by the party seeking discovery.
All aspects of the arbitration shall be treated as confidential. Neither the
parties nor the arbitrators may disclose the existence, content or results of
the arbitration, except as necessary to comply with legal or regulatory
requirements. Before making any such disclosure, a party shall give written
notice to all other parties and shall afford such parties a reasonable
opportunity to protect their interests.
The result of the arbitration will be binding on the parties, and judgment on
the arbitrators' award may be entered in any court having jurisdiction.
