EXHIBIT 10.11
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LICENSE & DISTRIBUTION AGREEMENT
THIS LICENSE & DISTRIBUTION AGREEMENT, effective as of last date of execution by
the parties (the "Effective Date"), is entered into by and between Electronic
Data Systems Corporation ("EDS"), EDS Information Services L.L.C. ("EIS"), a
Delaware limited liability company and wholly-owned subsidiary of Electronic
Data Systems Corporation, and 1525042 Ontario Ltd., incorporated in the Province
of Ontario, Canada, operating as Logical Sequence, ("Company"). The Effective
Date of this Agreement is April 29, 2003. The obligations of EDS set forth in
this Agreement will be performed by EDS, itself and through its direct and
indirect wholly-owned subsidiaries, including EIS. All references to EDS in this
Agreement will be deemed to include all such affiliates, and EDS and Company may
be referred to in this Agreement individually as a "party" and together as the
"parties".
Section One
Grant of License to Use DataCab Software
1.1 License to Use DataCab Software. Company hereby grants to EDS a
non-exclusive, irrevocable, perpetual, transferable, royalty-free, worldwide
right and license to use, reproduce, display, modify, demonstrate, sell,
license, sublicense, lease, distribute and transfer the source and object code
versions of the DataCab Software for any purpose, including, but not limited to
creating Derivative Works of the DataCab Software, embedding the DataCab
Software or its Derivative Works into EDS software products, and sublicensing
the DataCab Software or its Derivative Works to third parties. Except as
provided in Section 11.5(e), Section one of this Agreement shall survive
termination or expiration of this Agreement.
1.2 DataCab Software Derivative Works. The parties intend and agree that
all rights, including patents and copyrights, in any Derivative Work will be and
remain with EDS and EDS will be the sole owner of all right, title and interest
in and to each Derivative Work. Company hereby irrevocably transfers, assigns
and conveys the exclusive copyright ownership of each Derivative Work to EDS
free and clear of any liens, claims or other encumbrances, to the fullest extent
permitted by law. Company hereby agrees to execute all documents and perform all
acts reasonably requested by EDS in order to assist EDS in perfecting its rights
in and to a Derivative Work and EDS will reimburse Company for any expenses
reasonably incurred by Company in doing so. For purposes of this Agreement, the
term "Derivative Work" will mean a work that is based on one or more preexisting
works of the Datacab Software, Datacab Software source code or any written and
electronic documentation regarding the Datacab Software and includes, but is not
limited to, a revision, modification, translation, abridgement, condensation,
expansion, or any other form in which such a preexisting work is recast,
transformed, or adapted by EDS, in whole or in part, as a stand alone product,
to be integrated with EDS software to produce a new EDS product or enhance an
existing EDS product.
1.3 Support Services for DataCab Software. During the term of this
Agreement, Company will provide EDS with all modifications, new releases,
upgrades, updates, enhancements, error corrections, and patches that Company or
its employees or contractors develop, create or prepare for the DataCab
Software. For a period of six (6) months from the Effective Date of this
Agreement (the "DataCab Maintenance Period"), Company will provide EDS with such
telephone support services regarding the use installation, use and maintenance
of the DataCab Software as EDS may request from time to time. Upon termination
of the DataCab Maintenance Period, Company will provide EDS with such additional
DataCab Software support services as it may request from time to time at the
rates set out in Schedule E attached hereto.
1.4 Delivery of DataCab Software to EDS. Within five (5) days of the
Effective Date of this Agreement, Company will deliver the source code and
object code version of the DataCab Software to EDS (including, but not limited
to, all written and electronic documentation for the DataCab Software including,
but not limited to, design documents, specifications, installation guides and
comments regarding the source code). Company will also deliver to EDS each
subsequent DataCab Software version, release, update, upgrade, revision and
enhancement (and all associated documentation).
1.5 Third Party Software. To the extent that any third party software or
documentation is embedded in the DataCab Software, Company will obtain and
provide for EDS a perpetual, royalty-free, nontransferable, nonexclusive,
worldwide license to use such software or documentation as part of the DataCab
Software, or such other license as EDS and Company agree in writing.
Section Two
Grant of Licenses to Distribute XXX Software
2.1 Definitions. For purposes of this Agreement, the following terms will
have the meanings set out below:
(a) Automotive OEM. The term "Automotive OEM" means any manufacturer
of motor vehicles or motor vehicle parts and accessories.
(b) Automotive Retail Group. The term "Automotive Retail Group" means
those EDS employees dedicated to the EDS business unit located in Troy,
Michigan which sells DMS Software Products to automobile dealers.
(c) XXX Software. The term "XXX Software" means the software
applications identified on Schedule B.
(d) Americas. The term "Americas" means all the countries located in
North America, South America, and Central America (including the Caribbean
countries but not including Cuba).
(e) Automotive Retail Market. The term "Automotive Retail Market"
means (a) any entity or person which manufactures, sells, services or
leases (i) new or used automobiles (including light duty trucks,
motorcycles, heavy equipment and machinery, or agricultural implements,
equipment and machinery) or (ii) new or used automobile parts, and
accessories, and (b) any garage or service center which services
automobiles, light duty trucks, motorcycles, heavy equipment and machinery,
or agricultural implements, equipment and machinery).
(f) Converted Customer. The term "Converted Customer" means a XXX
Software licensee, identified on Schedule F to this Agreement, who executes
the Company Terms & Conditions.
(g) DMS Content. The term "DMS Content" means all third party content
and data to be used by EDS Customers in conjunction with the XXX Software
including, but not limited to, OEM data (e.g. parts masters, LTGs, etc.)
and other supporting data (e.g. VIN decoding, financial tables, etc.).
Company will deliver all DMS content to EDS in a format compatible with the
XXX Software.
(h) DMS Software Product. The term "DMS Software Product" means
computer software applications specifically designed to record, manage and
facilitate the essential administrative processes unique to automotive
dealerships (i.e. the accounting, sales, service and parts processes).
(i) EDS Customer. The term "EDS Customer" means (i) any person in the
Automotive Retail Market to whom EDS has sold a XXX Software license after
the Effective Date of this Agreement and (ii) a Converted Customer.
(j) iTIM Software. The term "iTIM Software" means the XXX Software
application which contains the features and functionality described in
Schedule B-1.
(k) iTIM Software Hosted Services. The term "iTIM Software Hosted
Services" means the functionality or web services which are made available
to an end-user or client when the iTIM Software is hosted by EDS or a third
party on servers at an EDS or third party data center.
(l) Non-Competition Period. The term "Non-Competition Period" means
the earlier of: (i) the last day on which the Agreement remains in effect
in accordance with the termination provisions of Section 11.2 of this
Agreement; (ii) the date on which either party provides written notice of
termination to the other party pursuant to Section 11.3 or Section 11.4 of
the Agreement; or (iii) the date on which EDS provides Company or the
escrow agent with written notice in accordance with the software escrow
agreement and Section 11.6 of this Agreement.
2.2 Grant of Licenses to EDS.
(a) Exclusive License to Distribute XXX Software in Americas. Upon the
terms set forth in this Agreement, Company grants to EDS an exclusive
license to: (a) display, demonstrate, market, and distribute the XXX
Software and the DMS Content to the Automotive Retail Market in the
Americas and to allow EDS affiliates and sub-distributors to do the same;
(b) to copy the XXX Software and the DMS Content for purposes of marketing,
distributing and supporting the use of the XXX Software and DMS Content and
to authorize EDS affiliates and sub-distributors to do the same; and (c) to
provide training and support services for the XXX Software to EDS Customers
to the Automotive Retail Market in the Americas.
(b) Non-Exclusive License to Distribute XXX Software Outside Americas.
Upon the terms set forth in this Agreement, Company grants to EDS a
non-exclusive license to: (a) display, demonstrate, market, and distribute
the XXX Software and the DMS Content to the Automotive Retail Market
outside the Americas and to allow EDS affiliates and sub-distributors to do
the same; (b) to copy the XXX Software and the DMS Content for purposes of
marketing, distributing and supporting the use of the XXX Software and the
DMS Content to the Automotive Retail Market outside the Americas and to
authorize EDS affiliates and sub-distributors to do the same; and (c) to
provide training and support services for the XXX Software to the
Automotive Retail Market outside of the Americas.
(c) License to Use Company Trademarks. Company grants to EDS, and EDS
accepts from Company, a nonexclusive, worldwide royalty-free license to use
Company's trade names, trademarks and service marks in connection with the
marketing and distribution of the XXX Software and to authorize EDS
affiliates and sub-distributors to do the same.
2.3 Delivery of XXX Software to EDS. Except as provided in Section 5 of
this Agreement, Company will deliver to EDS the object code versions of the XXX
Software (including, but not limited to, all written and electronic
documentation for the XXX Software) within five (5) days after the Effective
Date. Company will provide EDS with all major releases of the XXX Software at
least thirty (30) days prior to the first commercial release of such products by
Company.
2.4 DMS Content. Company will have sole responsibility for licensing,
obtaining and managing all DMS Content for the XXX Software.
2.5 XXX Software Certifications. Company will have sole responsibility for
obtaining and maintaining all standard certifications or endorsements for the
XXX Software which are offered, recommended or required by automobile
manufacturers for the sale, licensing or distribution of software to the dealers
of each such automobile manufacturer. All software developed by Company to meet
OEM certification requirements will be packaged or bundled by Company with OEM
data (e.g. parts masters, LTG's, etc) and referred to as a "Factory Pack" for
distribution to EDS Customers in accordance with the terms of this Agreement.
2.6 Licensing of XXX Software to EDS Customers. EDS will require all EDS
Customers to execute Company's standard terms and conditions, substantially in
the form set out in Schedule C (the "Company Terms & Conditions"). In the event
that any prospective customer desires to negotiate the Company Terms &
Conditions, EDS will refer such prospective customer to Company.
2.7 Right of First Refusal. Company grants EDS a Right of First Refusal to
distribute, on an exclusive basis, all other products to be made commercially
available by Company to the Automotive Retail Market in the Americas. The term
"Right of First Refusal" means: (a) Company will provide EDS with written notice
of its intent to market, license or release a product or in the Americas; (b)
EDS will have sixty days from its receipt of the written notice describing the
new Company product or service to elect to market, license, and sell the product
or service pursuant to the terms of this Agreement; and (c) during such sixty
day period, Company will provide such information as EDS reasonably requests
regarding the new product or service (including, but not limited to, information
related to product functionality, architecture, pricing, distribution or
packaging). In the event that EDS elects not to distribute any Company product
or service offered to it by Company, Company may appoint a third party to
distribute the Company product or service without compensating EDS and without
breach of this Agreement.
2.8 Competing Products. (a) Except as provided in Section 2.8(b) below,
EDS' Automotive Retail Group will not during the Non-Competition Period,
directly or indirectly, sell, distribute or deliver any DMS Software Product to
the Automotive Retail Market in Canada or Mexico that directly competes with the
XXX Software suite. (b) Notwithstanding anything contained in Section 2.8(a),
Company acknowledges and agrees that this Section 2.8 is not intended to
prohibit EDS' Automotive Retail Group from: (i) providing integration,
implementation or other services for any DMS Software Products; (ii) selling,
distributing, delivering, licensing or supporting any DMS Software Product,
which was developed by EDS prior to the Effective Date of this Agreement, or
(iii) developing a new DMS Software Product for an Automotive OEM and selling,
distributing, delivering, licensing or providing support for the new DMS
Software Product to the Automotive OEM and its affiliates and dealers upon the
written request of the Automotive OEM that EDS' Automotive Retail Group do so.
Section Three
Relationship Management
3.1 Relationship Managers. Each party will assign one employee to
coordinate the tasks to be undertaken pursuant to this Agreement and the
Transition Plan. The relationship managers will meet regularly to discuss
operational status, future plans, and problem resolution. The relationship
managers will also meet at least once every six months to review, discuss and
update their respective product and marketing plans.
3.2 XXX Software Product Plan. Company will prepare an annual detailed
product portfolio plan to include such topics as plans for new versions and
enhancements, software release schedules, and manufacture support plans for
review by EDS. Company will provide a forum in which EDS can provide input into
product plans.
3.3 EDS Sales & Marketing Plan. EDS will prepare an annual marketing and
sales plan for review by Company. The sales and marketing plan will include, but
will not be limited to, a description of the manner in which EDS will utilize
the Company's trademarks in marketing the XXX Software and sales projections for
the next calendar year; provided, however, the parties acknowledge and agree
that any such sales projections are not intended to impose contractual
obligations or requirements on EDS . The initial sales projections to be
included in the first EDS sales and marketing plan are set out in Schedule G.
Company may provide EDS with reasonable assistance in implementing the EDS
marketing plan including, but not limited to, providing subject matter experts
at trade shows in which EDS participates (e.g. NADA).
3.4 XXX Product Materials. Company will provide EDS with reasonable
quantities of existing marketing materials for XXX Software as well as access to
all online and hard copy training materials, at no cost to EDS.
3.5 Transition Period & Transition Plan. The parties agree to implement the
transition plan set out in Schedule H (the "Transition Plan") which shall
provide (or shall be deemed to provide) the following:
(a) Company will require existing EDS Customers of the XXX Software,
identified in Schedule F, to execute the Company Terms & Conditions in
accordance with the following milestones (the "Converted Customer
Milestones"): (i) at least thirty percent (30%) of the licensed users of
XXX Software identified by customer in Schedule F shall have executed the
Company Terms & Conditions within sixty (60) days of the Effective Date of
this Agreement; (ii) at least sixty percent (60%) of the licensed users of
XXX Software identified by customer in Schedule F shall have executed the
Company Terms & Conditions within four (4) months of the Effective Date of
this Agreement; and (iii) at least ninety percent (90%) of the licensed
users of XXX Software identified by customer in Schedule F shall have
executed the Company Terms & Conditions within five (5) months from the
Effective Date of this Agreement.
(b) EDS will commence distributing the XXX Software to Converted
Customers, providing support services to Converted Customers, billing and
collecting all fees owed by Converted Customers, all in accordance with the
terms of this Agreement.
(c) Notwithstanding anything in this Agreement, EDS will have no
responsibility to distribute, service or support any existing licensee of
the XXX Software unless such licensee of the XXX Software has executed the
Company Terms and Conditions.
(d) In the event of a conflict between the Transition Plan and the
terms of this Section 3.5, the terms contained in this Section 3.5 shall
supercede and govern.
3.6 Preferred Provider. In the event that EDS ARG elects to retain a third
party to provide software development services related to the development of a
DMS Software Product for licensing and distribution to automobile dealers in
Canada or Mexico, EDS will: (a) provide Company with prior notice of EDS' intent
to retain a third party to provide such software development services; (b)
provide Company with such information as Company may reasonably request
regarding the software development services to be retained by EDS; and (c)
provide Company with a reasonable opportunity to submit a bid or proposal for
Company to provide such software development services.
3.7 Ford Motor Company. Company represents that Ford Motor Company ("Ford")
was previously authorized to distribute and support certain XXX DMS software
components to the Ford dealers identified in Schedule J (the "Company Ford
Dealers"). Notwithstanding anything contained in this Agreement, the parties
acknowledge and agree: (a) EDS shall have no obligation under this Agreement to
distribute XXX Software or provide services or support of any kind to any Ford
dealer (including, but not limited to, the Company Ford Dealers) except those
Ford dealers which are or become EDS Customers pursuant to Section 2.1(c) of
this Agreement.; (b) in the event that Ford requests Company to provide Ford
with Level 3 Support Services (as that term is defined in Schedule D), Company
may do so and may retain all fees paid by Ford to Company for such Level 3
Support Services; and (c) in the event Ford requests Company to provide Level 1
Support Services or Level 2 Support Services (as those terms are defined in
Schedule D) or Ford or the Company Ford Dealers request additional licenses of
any XXX Software product or component, Company and EDS agree to cooperate in the
development and presentation of a joint proposal for the delivery of the
software or services to Ford dealers in a manner consistent with the terms and
conditions contained in this Agreement.
Section Four
Support Services for XXX Software
4.1 EDS Support Services to EDS Customers. EDS will provide the support
services identified in Schedule D to EDS Customers; provided, however, EDS will
have no obligation to provide support services to any EDS Customer who has not
paid all fees owed to EDS or its affiliates and distributors.
4.2 Company Support Services to EDS. Company will provide the support
services identified in Schedule D to EDS.
4.3 Discontinuance of XXX Software. Company will provide EDS with at least
ninety (90) days prior written notice of its intent to discontinue any XXX
Software application or to make a material change to the XXX Software.
Section Five
Development, Hosting & Distribution of iTIM Software
5.1 Development iTIM Software. Company agrees: (a) Company will begin
development of the iTIM Software, no later than the Effective Date, in
accordance with the specifications set out in Schedule B-1; (b) Company will
meet with EDS at least once each calendar month to review the development of the
iTIM Software; (c) Company will immediately notify EDS in the event that there
are material delays in the development of the iTIM Software; (d) Company will
deliver a pre-release version of the iTIM Software with ten (10) days of the
Effective Date of this Agreement and at least once each month thereafter; (e)
Company will deliver a Production Version of the iTIM Software to EDS no later
than twelve (12) months from the Effective Date; (f) Company will complete work
on the Commercial Version of the iTIM Software no later than fifteen (15) months
from the Effective Date; (g) Company acknowledges and agrees that time is of the
essence in the delivery of the Commercial Version of the iTIM Software to EDS;
and (h) notwithstanding anything contained in this Agreement, EDS may terminate
this Agreement pursuant to Section11.2 in the event that Company fails to
deliver the Commercial Version of the iTIM Software to EDSin accordance with the
date set out above. For purposes of this Agreement, the tem "Production Version"
shall mean a version of the iTIM Software which is ready for installation and
implementation by end-users in a production environment for trial, testing and
evaluation purposes. For purposes of this Agreement, the term "Commercial
Version" means the final version of the iTIM Software which is ready for
installation and implementation by end-users in a production environment.
5.2 Hosting of iTIM Software. Company and EDS agree: (a) EDS will have the
exclusive right, pursuant to Section 2.2(a) of this Agreement, to host the iTIM
Software, and to license the iTIM Software to third parties, for purposes of
making iTIM Software Hosted Services available to the Automotive Retail Market
in the Americas; and (b) EDS will have a non-exclusive right, pursuant to
Section 2.2(b) of this Agreement, to host the iTIM Software, and to license the
iTIM Software to third parties, for purposes of making iTIM Software Hosted
Services available to dealers and other end-users outside of the Automotive
Retail Market in the Americas.
5.3 Fees. EDS will establish the list prices for the iTIM Software Hosted
Services and iTIM Software by the Automotive Retail Market in the Americas. EDS
will pay Company the fees set out in the iTIM Software Sales & Marketing Plan,
established by Company and EDS pursuant to Section 5.4, for each licensed user
of the iTIM Software Hosted Services which EDS sells in accordance with the
terms of this Agreement.
5.4 iTIM Software Product & Marketing Plans. In addition to the annual
Software Product Plan required by Section 3.2, Company shall prepare an iTIM
Software Product Plan for the iTIM Software which includes a detailed
description of the functionality to be included in the Commercial Version of the
iTIM Software. Company will deliver the iTIM Software Product Plan to EDS for
review and approval no later than twelve (12) months from the Effective Date. In
addition to the annual Sales & Marketing Plan required by Section 3.3, EDS shall
prepare an iTIM Software Sales & Marketing Plan which includes a detailed
description of (a) the manner in which the iTIM Software will be hosted, (b) an
analysis of the cost associated with the hosting of the iTIM Software; (c) the
manner in which iTIM Software Hosted Services will be marketed and sold to
automobile dealers in the Automotive Retail Market in the Americas; and (d) the
manner in which the iTIM Software will be licensed and distributed to automobile
manufacturers and other third parties for hosting and use by such licensees.
Section Six
Fees Paid to Company
6.1 Payment of Fees. EDS will pay Company the fees set out in Schedule E.
Notwithstanding anything contained in this Agreement, no fees will be owed by
EDS as a result of the following: (i) use of the XXX Software by EDS, or its
affiliates and distributors in support of their marketing efforts (including,
but not limited to, demonstration, evaluation, benchmark, instruction and
training) and (ii) use of the XXX Software by EDS Customers for evaluation
purposes (not to exceed sixty days).
6.2 Enterprise EDS Customers. EDS and Company agree to negotiate in good
faith for special price quotations, and lower fees for specific large volume
business situations and strategic circumstances during the term of this
Agreement, on a case by case basis. Company will not unreasonably withhold or
delay its consent for such special price quotations or lower fees.
6.3 Taxes. EDS will bear all sales and value added taxes, levies,
withholding taxes and duties whether imposed by local city, county state,
provincial or federal agencies resulting from the performance of its obligations
herein, unless specifically provided otherwise in this Agreement including but
not limited to providing XXX Software to EDS Customers. Company will bear all
sales and value added taxes, levies, withholding taxes and duties whether
imposed by local city, county state, provincial or federal agencies resulting
from the performance of its obligations herein, unless specifically provided
otherwise in this Agreement including but not limited to providing the XXX
Software to EDS. Company agrees to reasonably cooperate with EDS in the audit or
minimization of any applicable tax and will make available to EDS, and any
taxing authority, all information, records, or documents relating to any audits
or assessments attributable to or resulting from the payment process under this
Agreement, and the filing of any tax returns or the contesting of any tax. If
EDS or an affiliate of EDS is required by law to make any deduction or to
withhold from any sum payable hereunder, then the sum payable by EDS or such
affiliate of EDS upon which the deduction is based will be paid to Company net
of such deduction or withholding. EDS or such affiliate of EDS will pay the
applicable tax authorities any such required deduction or withholding.
Section Seven
Representations & Warranties
7.1 Company Representations & Warranties. Company represents and warrants:
(a) The DataCab Software, the XXX Software, and the DMS Content (the
"Licensed Materials") will perform in all material respects according to
their documentation and are free from material errors, malfunctions and
defects.
(b) Company has not and will not enter into agreements or commitments
which conflict with the rights granted to EDS in this Agreement.
(c) Company is either the owner or the exclusive licensee of the
DataCab Software and the XXX Software, such rights extend for a period of
time at least as long as the licenses granted under this Agreement, and
Company will provide a copy of the fully executed agreement(s) evidencing
Company's ownership of or exclusive license to the DataCab Software and the
XXX Software within ten (10) days after the execution of this Agreement.
(d) Company has the unrestricted right to grant licenses of the scope
granted under this Agreement.
(e) The Licensed Materials will not contain preprogrammed preventative
routines or similar devices which prevent EDS from exercising the rights
set forth in this Agreement.
(f) Schedule E contains a list of all licensees of the XXX Software as
of the Effective Date of this Agreement.
7.2 Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET OUT IN THIS SECTION
7, NEITHER PARTY MAKES ANY WARRANTIES, EITHER EXPRESS OR IMPLIED, TO THE OTHER
PARTY INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.
Section Eight
Indemnification
8.1 Indemnification of EDS. Company agrees to defend EDS against any third
party action to the extent that such action is based upon (a) a claim that the
Licensed Materials or the Company's Confidential Information or any part
thereof, infringes a patent, copyright or trademark of a third party or
constitutes an unlawful disclosure, use or misappropriation of another party's
trade secret or (b) any claim arising from or related to the breach of Company's
terms and conditions executed by a licensee of the XXX Software. Company will
bear the expense of such defense and pay any damages and attorneys' fees that
are attributable to such claim finally awarded by a court of competent
jurisdiction.
8.2 Exclusions. Company will have no liability to EDS hereunder if: (a) the
claim of infringement is based upon the use of software provided by Company
hereunder in a manner for which the software was not designed, (b) EDS modifies
any software provided by the indemnitor hereunder and such infringement would
not have occurred but for such modification, or uses the software in the
practice of a patented process and there would be no infringement in the absence
of such practice or (c) the claim of infringement arises out of Company's
compliance with specifications provided by EDS and such infringement would not
have occurred but for such compliance.
8.3 Alternative Remedy. If Company Intellectual Property becomes the
subject of a claim under this Section 8, or in the indemnitor's opinion is
likely to become the subject of such a claim, then, in addition to defending the
claim and paying any damages and attorneys' fees as required above in this
Section, the indemnitor may, at its option and in its sole discretion: (a)
replace or modify the Company Intellectual Property to make it non-infringing or
cure any claimed misuse of another's trade secret; or (b) procure for EDS the
right to continue using Company Intellectual Property pursuant to this
Agreement. Any costs associated with implementing either of the above
alternatives will be borne by Company.
8.4 Procedures. The indemnification obligations set forth in this Section
will not apply unless the party claiming indemnification: (a) notifies the other
promptly in writing of any matters in respect of which the indemnity may apply
and of which the notifying party has knowledge in order to allow the indemnitor
the opportunity to investigate and defend the matter; provided, however, that
the failure to so notify will only relieve the indemnitor of its obligations
under this Section if and to the extent that the indemnitor is prejudiced
thereby; and (b) gives the other party full opportunity to control the response
thereto and the defense thereof, including any agreement relating to the
settlement thereof; provided, however, that the indemnitee will have the right
to participate in any legal proceeding to contest and defend a claim for
indemnification involving a third party and to be represented by legal counsel
of its choosing, all at the indemnitee's cost and expense. However, if the
indemnitor fails to promptly assume the defense of the claim, the party entitled
to indemnification may assume the defense at the indemnitor's cost and expense.
The indemnitor will not be responsible for any settlement or compromise made
without its consent, unless the indemnitee has tendered notice and the
indemnitor has then refused to assume and defend the claim and it is later
determined that the indemnitor was liable to assume and defend the claim. The
indemnitee agrees to cooperate in good faith with the indemnitor at the request
and expense of the indemnitor. This Section will survive termination of
expiration of this Agreement for any reason.
Section Nine
Limitation of Liability & Insurance
9.1 Consequential Damages. Except as provided in Section8, neither party
will be liable for loss of income, profit or savings or indirect, incidental,
consequential, exemplary, punitive or special damages of any party, including
third parties, even if advised of the possibility of such damages in advance,
and all such damages are expressly disclaimed.
9.2 Limitation on Liability. EDS' aggregate liability with respect to
claims arising under, in connection with, or in any way relating to this
Agreement and under any theory of liability, whether in contract or in tort to
the extent permitted by applicable law, shall not exceed the total amount of
payments made to EDS hereunder over the four month period immediately preceding
the event giving rise to such claim.
9.3 Limitation on Actions. Except as provided in Section 8, no cause of
action which arose out of an event or events which occurred more than two years
prior to the filing of a suit alleging a claim or cause of action may be
asserted by either party against the other.
9.4 Insurance. During the term of this Agreement, each party will maintain
at its own expense, in addition to all legally required insurance, policies of
insurance in such amounts and on such other terms and conditions as it
reasonably determines are necessary with regard to its business, provided that
the amounts and other terms and conditions of such policies must be at least
equivalent to policies appropriate for and typically maintained by other
companies of comparable size engaged in similar business activities. Each party
will provide, upon request, proof of its insurance coverage (such as a
certificate of insurance executed by an authorized representative of the party).
9.5 Survival. Section 9 of this Agreement will survive the termination or
expiration of this Agreement for any reason.
Section Ten
Confidentiality
10.1 Scope of Obligation. EDS and Company hereby agree: (a) to hold
Confidential Information of the other in strict confidence and not to make it
available to any third party except as is necessary for the proper performance
of their obligations or in accordance with their rights under this Agreement;
(b) to impose confidentiality restrictions upon the parties to whom any
Confidential Information is disclosed; and (c) to take at least the same
precautions to protect the Confidential Information of the other party as it
takes for its own confidential and proprietary information of like importance,
but in no event less than reasonable precautions. For purposes of this
Agreement, "Confidential Information" shall mean any information, software or
technical data provided by either party to the other which is identified as
Confidential Information at the time of disclosure or, if disclosed orally, is
designated in writing as Confidential Information within thirty (30) days of the
oral disclosure, or as identified under the terms and conditions of this
Agreement.
10.2 Exceptions. The foregoing will not prevent either party from
disclosing information: (a) that belongs to such party or is already known by
the recipient party without an obligation of confidentiality other than under
this Agreement; (b) is publicly known or becomes publicly known through no
unauthorized act of the recipient party; (c) is rightfully received from a third
party; (d) is independently developed without use of the other party's
confidential information or (e) is disclosed without similar restrictions to a
third party by the party owning the confidential information. If confidential
information is required to be disclosed pursuant to a requirement of a
governmental authority, such confidential information may be disclosed pursuant
to such requirement so long as the party required to disclose the confidential
information, to the extent possible, provides the other party with timely prior
notice of such requirement and coordinates with such other party in an effort to
limit the nature and scope of such required disclosure. The provisions of this
Section 10 will survive the expiration or termination of this Agreement for any
reason. Company understands that EDS is in the business of marketing software
and that EDS develops, licenses and acquires software for its own use and to
market to third parties. Except as expressly provided in Section 2.8 of this
Agreement, Company agrees that entering into this Agreement will not preclude
EDS from developing, licensing, acquiring or marketing other software with
functionalities similar to the XXX Software.
10.3 Media Releases. Except for any announcement intended solely for
internal distribution by Company or any disclosure required by legal,
accounting, or regulatory requirements beyond the reasonable control of Company,
all media releases, public announcements, or public disclosures (including, but
not limited to, promotional or marketing material) by Company or its employees
or agents relating to this Agreement or its subject matter, or including the
name, trade name, trade xxxx, or symbol of EDS or any affiliate of EDS, will be
coordinated with and approved in writing by EDS prior to the release thereof.
Company will not represent directly or indirectly that any product or service
provided by Company to EDS has been approved or endorsed by EDS or use the name,
trade name, trade xxxx, or symbol of EDS or any affiliate of EDS without EDS'
express written consent.
Section Eleven
Term & Termination
11.1 Term. This Agreement will continue in force for an initial term of
five (5) years following the Effective Date unless terminated earlier in
accordance with this Section 11. After the initial term, this Agreement will be
automatically renewed for additional and successive terms of one year unless
terminated by either party by written notice given at least ninety (90) days
prior to the end of the initial term or any renewal term.
11.2 Termination for Breach. If either party materially defaults in the
performance of any of its duties or obligations under this Agreement (including,
but not limited to failure to deliver the commercial version of the iTIM
Software to EDS in accordance with Section 5.1 of this Agreement) and fails to
cure such default within 30 days after written notice thereof, the other party
may, by giving written notice thereof, terminate this Agreement effective
immediately. For purposes of this Agreement, the term "material default" shall
include, but is not limited to, Company's failure to meet the Converted Customer
Milestones set out in Section 3.5(a) of this Agreement and Company's breach of
Section 7.1(c).
11.3 Termination for Insolvency or Bankruptcy. Either party may immediately
terminate this Agreement by giving written notice to the other party in the
event of (i) the liquidation or insolvency of the other party, (ii) the
appointment of a receiver or similar officer for the other party, (iii) an
assignment by the other party for the benefit of all or substantially all of its
creditors, (iv) entry by the other party into an agreement for the composition,
extension, or readjustment of all or substantially all of its obligations, or
(v) the filing of a meritorious petition in bankruptcy by or against the other
party under any bankruptcy or debtors' law for its relief or reorganization.
11.4 Termination for Convenience. Either party may terminate this Agreement
for any reason by giving one hundred eighty days prior written notice to the
other party.
11.5 Consequences of Termination.
(a) Except as provided in Section 11.5(e), termination or expiration of
this Agreement will not affect the rights of any licensee of the Licensed
Materials or any right of EDS to use the DataCAB Software in accordance with
Section 1 of this Agreement or to use the source code for the XXX Software in
accordance with Section11.6.
(b) Upon termination or expiration of this Agreement for any reason by
either party, EDS, affiliates and distributors will cease marketing,
distributing and supporting the XXX Software and Company will have sole and
exclusive responsibility for providing support services to EDS Customers after
the date of termination.
(c) In the event this Agreement is terminated for any reason, Company
agrees to pay EDS an amount equal to the following: (i) Six Hundred Thousand
Canadian Dollars ($600,000 Canadian) if notice of termination is provided to
either party prior to April 1, 2004; (ii) Four Hundred Thousand Canadian Dollars
($400,000 Canadian) if notice of termination is provided to either party after
April 1, 2004 but prior to the Commercial Version Review Date; and (iii) Two
Hundred Thousand Canadian Dollars ($200,000 Canadian) if notice of termination
is provided to either party after the Commercial Version Review Date but prior
to April 1, 2005.The term "Commercial Version Review Date" means the date which
is sixty (60) days after Company's delivery of the iTIM Software to EDS pursuant
to Section 5.1(f) of the Agreement. Company will pay any amount owed to EDS
pursuant to this Section 11(c) within six (6) months from the date on which
Company received or issue a notice of termination pursuant to Section 11.(d) The
expiration or termination of this Agreement for any reason will not release
either party from any liabilities or obligations set forth herein which (i) the
parties have expressly agreed will survive any such expiration or termination or
(ii) remain to be performed or by their nature would be intended to be
applicable following any such expiration or termination This Section 11 will
survive termination or expiration of this Agreement for any reason.
(e) In the event that this Agreement is terminated for any reason during
the period one year after the Effective Date, all rights granted to EDS pursuant
Section 1 of this Agreement shall terminate EDS will discontinue use of the
DataCab Software and EDS will return the DataCab Software and related
documentation to Company.
11.6 Source Code Escrow. The source code for the XXX Software, including
the latest Updates to XXX Software, will from time to time be placed in escrow
by Company with provisions authorizing release to EDS if Company: (a) should
cease to provide maintenance or support to EDS for the XXX Software for any
reason; (b) should cease business operations generally or transfer all or
substantially all of its assets or obligations set forth in this Agreement to a
third party which has not assumed all of the obligations of Company; (c) should
make or suffer to be made an assignment for the benefit of its creditors, or
file a voluntary petition in bankruptcy; (d) should seek or consent to or
acquiesce in the appointment of a receiver for liquidation; (e) Company or a
majority of its stockholders takes any action looking into dissolution or
liquidation of Company, unless such action is solely for the purpose of business
re-organization and/or amalgamation; or (f) Company fails to pay EDS any amount
owed to EDS pursuant to Section 11.5(c) of the Agreement. Company will ensure
that an up updated version of the XXX Software is placed in escrow at least once
every six (6) months. EDS will have the non-exclusive, royalty-free right and
license to use the source code to sublicense the XXX Software in accordance with
Section 2.2 of the Agreement and to modify, display, duplicate, and maintain the
XXX Software and create derivative works of the XXX Software for purposes of
sublicensing the XXX Software in accordance with Section 2.2 of the Agreement;
provided, however, that Company (or its successors in interest) or its licensors
shall retain sole ownership of the XXX Software and all related intellectual
property rights.
Section Twelve
Dispute Resolution
12.1 Dispute Escalation. In the event of any dispute, controversy or claim
of any kind or nature arising under or in connection with this Agreement
(including disputes as to the creation, validity, interpretation, breach or
termination of this Agreement) (a "Dispute"), then upon the written request of
either party, each of the parties will appoint a designated senior business
executive whose task it will be to meet for the purpose of endeavoring to
resolve the Dispute. The designated executives will meet as often as the parties
reasonably deem necessary in order to gather and furnish to the other all
information with respect to the matter in issue which the parties believe to be
appropriate and germane in connection with its resolution. Such executives will
discuss the Dispute and will negotiate in good faith in an effort to resolve the
Dispute without the necessity of any formal proceeding relating thereto. The
specific format for such discussions will be left to the discretion of the
designated executives but may include the preparation of agreed upon statements
of fact or written statements of position furnished to the other party. No
formal proceedings for the resolution of the Dispute under Section 12.2 or 12.3
may be commenced until the earlier to occur of (a) a good faith mutual
conclusion by the designated executives that amicable resolution through
continued negotiation of the matter in issue does not appear likely or (b) the
30th day after the initial request to negotiate the Dispute.
12.2 Mediation. Any dispute, controversy or claim arising under, out of, in
connection with or in relation to this Agreement, or the breach, termination,
validity or enforceability of any provision hereof (a "Dispute"), if not
resolved informally through negotiation between the parties, will be submitted
to non-binding mediation. The parties will mutually determine who the mediator
will be from a list of mediators obtained from the American Arbitration
Association office located in the city determined as set forth below in this
Section (the "AAA").
12.3 Arbitration. If the parties are unable to agree on the mediator, the
mediator will be selected by the AAA. If any Dispute is not resolved through
mediation, it will be resolved by final and binding arbitration conducted in
accordance with and subject to the Commercial Arbitration Rules of the AAA then
applicable. One arbitrator will be selected by the parties' mutual agreement or,
failing that, by the AAA, and the arbitrator will allow such discovery as is
appropriate, consistent with the purposes of arbitration in accomplishing fair,
speedy and cost effective resolution of disputes. The arbitrator will reference
the rules of evidence of the Federal Rules of Civil Procedure then in effect in
setting the scope of discovery, except that no requests for admissions will be
permitted and interrogatories will be limited to identifying (a) persons with
knowledge of relevant facts and (b) expert witnesses and their opinions and the
bases therefore. Judgment upon the award rendered in any such arbitration may be
entered in any court having jurisdiction thereof. Any negotiation, mediation or
arbitration conducted pursuant to this Section will take place in Plano, Texas,
if initiated by Company, and in Toronto, Canada, if initiated by EDS, and each
party will bear its own costs and expenses with respect to any such negotiation,
mediation or arbitration, including one-half of the fees and expenses of the
mediator or arbitrator, if applicable. Other than those matters involving
injunctive relief or any action necessary to enforce the award of the
arbitrator, the parties agree that the provisions of this Section are a complete
defense to any suit, action or other proceeding instituted in any court or
before any administrative tribunal with respect to any Dispute. Nothing in this
Section prevents the parties from exercising their right to terminate this
Agreement in accordance with Section 9. Section 12 will survive termination or
expiration of this Agreement for any reason.
Section Thirteen
General
13.1 Governing Law. This Agreement will be governed by and construed in
accordance with the substantive laws of the State of Michigan, without giving
effect to any choice-of-law rules that may require the application of the laws
of another jurisdiction. THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AGREEMENT SHALL NOT BE GOVERNED BY THE PROVISIONS OF THE 1980 UNITED NATIONS
CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS.
13.2 Waiver. The failure of either party to enforce at any time any of the
provisions of this Agreement will in no way be construed to be a waiver of such
provision, nor in any way affect the validity of this Agreement or any part
thereof, or the right of the other party thereafter to enforce each and every
provision.
13.3 Notices. All notices required by or relating to this Agreement will be
in writing and will be sent to the respective party at its address set forth
below, or to such other address as either party may specify by written notice to
the other:
To EDS: President
Automotive Retail Group (ARG)
Electronic Data Systems Corporation
000 Xxxxx Xxxxx, Xxxxxx 000
Xxxx, XX 00000
To Company: Chief Executive Officer
1525042 Ontario Ltd.
X.X. Xxx 00000
Xxxxxxx, Xxxx Xxxxxx
Xxxxxx X0X-0X0
13.4 Severability. If any provision of this Agreement is invalid under any
applicable statute or rule of law, such provision will be deemed to be deleted
and the remainder of this Agreement will continue to be binding upon the parties
hereto.
13.5 Independent Contractors. The parties are independent contractors, and
this Agreement will not be construed as constituting either party as partner,
joint venturer or fiduciary of the other, as creating any other form of legal
association that would impose liability on one party for the act or failure to
act of the other or as providing either party with the right, power or authority
(express or implied) to create any duty or obligation of the other. Except as
otherwise expressly provided in this Agreement, each party has the sole right
and obligation to supervise, manage, contract, direct, procure, perform or cause
to be performed all work to be performed by it pursuant to this Agreement. To
the extent that any term or condition of this Agreement might otherwise be
deemed to create any such relationship the parties agree that the terms of this
Agreement will be deemed to have been amended, modified or deleted to the extent
necessary to exclude any such interpretation.
13.6 Headings. The descriptive headings are inserted for reference only and
do not limit, expand or otherwise affect the meaning or construction of the
language of this Agreement.
13.7 Entire Agreement. This Agreement and the Schedules hereto constitute
the entire agreement between the parties and will supersede all proposals or
prior Agreements, oral or written and all other communications between the
parties relating to the subject matter of this Agreement including, but not
limited to, any nondisclosure agreements between the parties. This Agreement may
not be varied other than in writing, executed by the duly authorized
representatives of both parties.
13.8 Force Majeure. Neither party will be liable for any delay in or
failure to perform any of its obligations under this Agreement if due to any
cause or condition beyond their reasonable control, whether foreseeable or not.
13.9 Solicitation of Employees. Company, including its principals, and any
parent, subsidiary, or affiliated companies, jointly and severally agree that
during the term of this Agreement, or within one year following the termination
thereof, it will not hire any of EDS' employees.
13.10 Compliance with Law. EDS and Company will comply with all laws, rules
and regulations in all jurisdictions applicable to this Agreement, including but
not limited to those governing the export or import of computer equipment,
software or technical data. Notwithstanding anything contained in this
Agreement, EDS will have no obligation to distribute the Licensed Materials to
any person or to any country in a manner which is inconsistent with U.S. export
laws or regulations.
13.11 Assignment. This Agreement will be binding on the parties and
their respective successors in interest and assigns, but neither party will have
the power to assign this Agreement (including, but not limited to, assignment by
operation of law) without the prior written consent of the other party which
will not be unreasonably withheld; provided, however, nothing in this Agreement
shall limit or prohibit EDS from delegating any right or obligation to a
subsidiary, assigning this Agreement (in whole or in part) to a subsidiary, or
from the assignment of the agreement as part of transfer or sale of all or
substantially all of EDS ' assets.
1525042 ONTARIO LIMITED ELECTRONIC DATA SYSTEMS CORPORATION
By:/s/ Xxxxx X Xxxxxxx By: /s/ Xxxxx X. Xxxxxxx
-------------------------------- -----------------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxxx
------------------------------ ---------------------------------
Title: President Title: Arg President
----------------------------- --------------------------------
Date: April 29, 2002 Date: 04.29.03
------------------------------ --------------------------------
EDS INFORMATION SERVICES L.L.C.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
---------------------------------
Title: Arg President
--------------------------------
Date: 04.29.03
--------------------------------
