Exhibit 10.31
MASTER LICENSING AGREEMENT
By and between
Veracicom
and
InsynQ, Inc.
This Agreement is entered into as of this 24th day of April, 2000 (the
"Effective Date") by and between Veracicom, Inc. ("VERACICOM") a Washington
corporation, having its principal place of business XX Xxx 0000 Xxxxxx,
Xxxxxxxxxx 00000 and InsynQ ("InsynQ"), a Washington corporation, having its
principal place of business at 0000 Xxxxxxxx, Xxxxxx, XX 00000.
RECITALS
A. WHEREAS, INSYNQ has developed and distributes proprietary services
(`Services') that enable application hosting over the Internet;
B. WHEREAS, VERACICOM wishes to obtain a license to sell such services on the
terms and conditions set forth herein, and INSYNQ wishes to license the sale of
such services to VERACICOM on such terms and conditions.
NOW THEREFORE, for good and valuable consideration, the parties hereby agree as
follows:
1. DEFINITIONS.
1.1 "Application Hosting" means the process of installing software on a server
located in InsynQ's data center and providing ongoing outsourced services
including, but not limited to data back-up, application delivery and data
storage for a third party.
1.2 "Licensing, Licensee" means A Veracicom Business Partner, a third party,
any subsidiary, parent or related or affiliated company of VERACICOM, that is
appointed by VERACICOM to promote, market and sublicense the service to End
Users.
1.3 "End User" means a third party who licenses a copy of the Product for
internal use and not for resale.
1.4 "VERACICOM Products" means the products developed, manufactured and
distributed by VERACICOM which are listed on Exhibit B attached hereto and
amended from time to time, and incorporated herein by reference.
1.5 "Trademarks" means the trademarks, logos and trade names used by INSYNQ in
connection with the Services and Documentation which are provided by INSYNQ to
VERACICOM from time to time.
2. LICENSE GRANTS.
2.1 License. Subject to the terms and conditions of this Agreement, INSYNQ
hereby grants VERACICOM a non-exclusive, non-transferable, worldwide license to
promote, market, distribute and sublicense application hosting services, bundled
or unbundled with VERACICOM products, to End Users. ('Services')
2.2 Distribution.
(a) VERACICOM may distribute the application hosting services, bundled or
unbundled with VERACICOM applications, through Licensee, provided that prior to
providing the services to any Licensee, VERACICOM will have entered into a
written agreement with such Licensee ("Distribution Agreement") containing at a
minimum provisions at least as protective of INSYNQ and not materially less
restrictive than those as set forth in this Agreement. It is understood that so
long as a Distribution Agreement complies with the foregoing, it may be a
standard form of distribution agreement that VERACICOM uses for its other
products. As such, a copy of the Veracicom Licensing agreement is attached
hereto as Exhibit D, and approval of this agreement constitutes acceptance of
said Exhibit D.
(b) VERACICOM will use its best efforts to ensure that all Licensees abide by
the terms of their Distribution Agreements and, upon request by INSYNQ, shall
keep INSYNQ apprised of its activities to enforce such terms with particular
Licensees with regard to the Services. In addition, VERACICOM shall take all
reasonable steps to ensure that INSYNQ shall have the right to enforce such
agreements as an intended third party beneficiary. VERACICOM further agrees that
(i) INSYNQ may join VERACICOM as a named plaintiff in any suit relating to
Services, brought by VERACICOM against any Licensee and (ii) VERACICOM will take
such other actions, give such information, and render such aid, as may be
necessary to allow INSYNQ to bring and prosecute such suits.
2.3 Documentation. In addition to the rights granted to VERACICOM to reproduce
the Services pursuant to Section 2.1 above, and subject to the terms and
conditions of this Agreement, INSYNQ hereby grants to VERACICOM the right to
reproduce and distribute the documentation produced by InsynQ including but not
limited any service level agreements, marketing collateral, connectivity
guidelines and/or rates, in whole or in part, in connection with its marketing
and licensing of the Services.
2.4 No Other Grant. Except as expressly provided herein, INSYNQ does not grant
to VERACICOM any right or license, express or implied Documentation or
Trademarks.
3. VERACICOM OBLIGATIONS.
3.1 Promotion of Product. VERACICOM shall use reasonable commercial efforts to
market, promote and distribute InsynQ's services by marketing said services
through their sales force and Licensee's, to end-users interested in utilizing
the Veracicom Products in an outsourced environment.
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3.2 Advertising. VERACICOM shall not make any representations or warranties
with respect to the application hosting services provided by InsynQ that are
inconsistent with the descriptions and warranties contained in the Documentation
and shall not make any representations or warranties on INSYNQ's behalf.
3.3 Sales Personnel. VERACICOM shall equip its sales force with adequate
training, marketing, sales and technical literature as determined by VERACICOM's
reasonable judgment, and VERACICOM agrees to maintain at all times a competent,
qualified sales and support staff for services in accordance with VERACICOM's
guidelines and needs.
3.4 Press Release. Neither party shall have the right to issue any press
release concerning this Agreement without the other party's prior approval. The
parties shall, however, cooperate so that each party may issue such a press
release.
3.5 Support. INSYNQ shall be solely responsible for providing Xxxxx 0 support
defined as taking the end-user's, Licensee's or VERACICOM's first call and
identifying whether the incident is an application problem specifically or a
InsynQ service incident. INSYNQ shall have no obligation to furnish any
assistance, information or documentation with respect to the VERACICOM Products,
and INSYNQ shall refer any customer service questions relating to such to
VERACICOM.
3.6 Compliance with Law. VERACICOM shall comply with all laws and regulations
applicable to VERACICOM's performance and the marketing and distribution of the
Services and Products hereunder. Without limiting the generality of the
foregoing, VERACICOM (a) shall not distribute the Services in any country where
such distribution would be unlawful; and (b) shall comply with all Department of
Commerce and other United States exports controls regarding the license and
delivery of technology and VERACICOM Products abroad including the Export
Administration Act of 1979, as amended, any successor legislation, and the
Export Administration Regulations issued by the Department of Commerce, Bureau
of Export Administration.
4. COMPENSATION.
4.1 Fees. INSYNQ shall charge Veracicom the amounts set forth on Exhibit C
attached and incorporated herein by reference pursuant to the schedule set forth
therein.
4.2
4.3 Payment in United States Currency. All payments shall be made in United
States Dollars, free of any withholding tax and of any currency control or other
restrictions to Veracicom at the address indicated by Veracicom to INSYNQ.
4.4 Payment Schedule. All payments for InsynQ services shall be due a payable
by the 15/th/ day of each month following the month in which the actual services
were contracted.
4.5 Nonrefundable. Subject to Veracicom's substantial performance of its
obligations as set forth in this Agreement, all amounts received by Veracicom
hereunder shall be nonrefundable.
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4.6 Royalty report. INSYNQ will provide a monthly written report, in
substantially the same format as shown in Exhibit E of the users of the Services
that for the previous month, which shall be included with the payments as
required by this Section 4.
5. INSYNQ'S OBLIGATIONS.
5.1 Uptime. INSYNQ warrants that it shall maintain the following service
levels with respect to Veracicom's End User and Licensee's. INSYNQ's systems
will be operational such that End Users and Licensees have the ability to access
the Software a minimum of 97% of the time. INSYNQ has contractually agreed with
VERACICOM that access to the Software by Veracicom's End Users and Licensees
will be available. In the event that InsynQ is unable to meet the guaranteed 97%
service level agreement, VERACICOM shall be compensated as follows: The afore
mentioned up-time, does not include telecommunications lines, or it's ancillary
components at the customers site.
97%+ uptime 0% discount
90% - 96.99% 7% discount off impacted customer's service fees
80% - 89.99% 17% discount off impacted customer's service fees
Reduced by an equal ratio 50% down time equals 50% discount off impacted
customer's service fees
5.2 Training Fees. During the term of this Agreement, INSYNQ shall provide an
initial one-day sales training to the existing VERACICOM sales team free of
charge at VERACICOM corporate headquarters. Subsequent sales trainings will be
charged at the rate of $1,000 per day and all related travel expenses at a
location centrally agreed upon by both parties. InsynQ will also provide a one
day technical administration training class to Veracicom and Licensee in
Sacramento, California in late May or June, 2000 free of charge. Subsequent
technical trainings will be charged at the rate of $1,000 per day and all
related travel expenses at a location centrally agreed upon by both parties
5.3 Maintenance and Support.
(a) General. INSYNQ shall provide maintenance and technical support to
VERACICOM, Licensee's and End Users during INSYNQ's regular business hours (7 am
to 7 pm, Pacific time) with on-call pager service starting at 6 am pacific time.
All support shall be provided in English from INSYNQ's offices, via a 1-800
telephone line unless otherwise agreed in advance in writing. INSYNQ shall make
best efforts to respond to a customer's "system down" within two hours from the
time that INSYNQ is aware of such "system down". VERACICOM may make requests for
support by telephone, pager, fax, e-mail or any other reasonable means. INSYNQ's
obligation to provide support under this Section 5.3 shall extend solely to
requests for support received from VERACICOM, Licensee's and End Users. INSYNQ
shall designate appropriate engineering and technically support staff that shall
be available to assist VERACICOM, Licensee's and End Users in resolving any
maintenance and technical support problems. Support shall include a designated
representative to act as a liason between INSYNQ and VERACICOM.
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6.0 VERACICOM's OBLIGATIONS
6.1 Trademark Use.
(a) Use. During the term of this Agreement, VERACICOM may and without
obligation use and reproduce the Trademarks, including but not limited to
InsynQ, Inc.(TM), InterlynQ Server(TM), IdesQ Applicance(TM), and additional
products as developed, in connection with VERACICOM's marketing, advertising,
promotion, and distribution of the Product and/or Services. VERACICOM's use of
the Trademarks shall not create any right, title or interest therein. VERACICOM
shall use the Trademarks only in a manner which complies in all material
respects with INSYNQ's policies in effect from time to time.
(b) Goodwill. If VERACICOM, in the course of distributing the services,
acquires any goodwill or reputation in any of the Trademarks, all such goodwill
or reputation shall automatically vest in INSYNQ when and as, on an on-going
basis, such acquisition of goodwill or reputation occurs, as well as at the
expiration or termination of this Agreement, without any separate payment or
other consideration of any kind to VERACICOM and VERACICOM agrees to take all
such actions necessary to effect such vesting. VERACICOM shall not contest the
validity of any of the Trademarks or INSYNQ's exclusive ownership of them.
(c) Adoption of Marks. During the term of this Agreement, VERACICOM shall not
adopt, use, or register, whether as a corporate name, trademark, service xxxx or
other indication of origin, any of the Trademarks, or any word or xxxx
confusingly similar to the Trademarks in any jurisdiction.
6.2 Protection of Rights. VERACICOM shall use reasonable efforts to protect
INSYNQ's proprietary rights, to the extent that it is aware of those proprietary
rights, related to the services, including without limitation, INSYNQ's
copyright, patent, trade secret, and trademark rights ("Proprietary Rights"),
and to cooperate without charge in INSYNQ's efforts to protect its Proprietary
Rights. VERACICOM shall promptly notify INSYNQ of any known or suspected
infringements of INSYNQ's Proprietary Rights that come to VERACICOM's attention.
INSYNQ shall have the exclusive right to institute infringement or other
appropriate legal action against alleged prospective or actual infringers of its
Proprietary Rights. INSYNQ shall incur all expenses in connection therewith and
shall retain all monetary recoveries received therefrom. VERACICOM shall not
take any action to jeopardize, limit or interfere with INSYNQ's ownership of and
rights in the Services.
7. CONFIDENTIALITY.
7.1 Confidential Information. "Confidential Information" means (i) the terms
and conditions of this Agreement, and (ii) any and all other information
disclosed by one party to the other which is marked "confidential" or
"proprietary", including oral information which is designated confidential at
the time of disclosure, provided that it is reduced to a written summary marked
"confidential" which is supplied to the other party within thirty (30) days of
the oral disclosure. Subject to the provisions of Section 7.2, all information
regarding the services, including without limitation, all information with
respect to the use, installation and operation of the services, whether received
by VERACICOM from INSYNQ or developed by VERACICOM, shall be deemed INSYNQ
Confidential Information whether or not it is designated as confidential.
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7.2 Exclusions. "Confidential Information" does not include any information
that the receiving party can demonstrate by written records: (a) was known to
the receiving party prior to its disclosure hereunder by the disclosing party;
(b) is independently developed by the receiving party; (c) is or becomes
publicly known through no wrongful act of the receiving party; (d) has been
rightfully received from a third party authorized to make such disclosure
without restriction; (e) has been approved for public release by the disclosing
party's prior written authorization; or (f) has been produced or disclosed
pursuant to applicable law, regulation or court order, provided that the
receiving party provides prompt advance notice thereof to enable the disclosing
party to seek a protective order or otherwise prevent such disclosure.
7.3 Preserving Confidentiality. Each party hereby agrees that it shall not use
any Confidential Information received from the other party other than as
expressly permitted under the terms of this Agreement or as expressly authorized
in writing by the other party. Neither party shall disclose the other party's
Confidential Information to any person or entity other than its officers,
employees and consultants who need access to such Confidential Information in
order to effect the intent of this Agreement and who have entered into written
confidentiality agreements with that party consistent with this Section 7.
8. REPRESENTATIONS AND WARRANTIES.
8.1 By INSYNQ.
(a) General. INSYNQ represents and warrants that: (i) INSYNQ owns all right,
title and interest in and to the services; (ii) INSYNQ has not granted, and will
not grant during the term of this Agreement, any rights in or to the Services
that conflict with the rights granted to VERACICOM hereunder; (iii) to the best
of INSYNQ's knowledge the use, reproduction and distribution of the services
does not infringe any United States copyright, patent (issued as of the
Effective Date), trademark or trade secret of any third party; and (iv) INSYNQ
has the right, power and authority to grant the rights and licenses specified in
this Agreement.
9. INDEMNIFICATION.
9.1 By INSYNQ. INSYNQ agrees to defend, indemnify and hold VERACICOM harmless
from any liability or expense paid to third parties, End Users, Licensees
(including without limitation reasonable attorneys' fees) incurred by VERACICOM
as a result of any judgement or adjudication against VERACICOM or final
settlement arising from any claim that the Services or Documentation under
ordinary use and when used within the scope of this Agreement, were not provided
in accordance with this or any other INSYNQ Agreement, or infringe any United
States copyright, patent (issued as of the Effective Date), trademark, or trade
secret of any third party; provided that VERACICOM provides INSYNQ with (a)
prompt written notice of such claim; (b) promptly tenders to INSYNQ sole control
over the defense and settlement of such claim at INSYNQ's expense and with
INSYNQ's choice of counsel; and (c) full information and reasonable assistance
to defend and/or settle such claim. VERACICOM may not settle any such claim
without INSYNQ's prior written consent. In the event that the Services or
Documentation, or any part of any of the foregoing, is held, or in INSYNQ's sole
opinion, may be held to constitute an infringement, INSYNQ, at its option and
expense, may either (x) modify the Services or Documentation so they become non-
infringing; (y) procure for VERACICOM a license to use the infringing materials.
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9.2 Exclusions. Notwithstanding the foregoing, INSYNQ will have no liability
if the alleged infringement arises from (a) the modification of the Services or
Documentation by any party other than INSYNQ; (b) the use of other than the
then-current, unmodified Release of the Services; or (c) the combination of the
Services with computer programs or products not provided to VERACICOM by INSYNQ,
unless INSYNQ authorized such combination in advance in writing.
9.3 By VERACICOM. Except as set forth in Section 9.1, VERACICOM hereby agrees
to indemnify and hold INSYNQ harmless against any cost, liability, and expense
(including reasonable attorneys' fees) arising from any action or claim brought
or threatened against INSYNQ arising from (i) the sales and marketing practices
of VERACICOM, its Licensings, or VERACICOM's or its Licensing's representatives
and agents, including without limitation, any material misrepresentation,
warranty or guarantee made by VERACICOM or its agents, representatives or
Licensings regarding the Services other than those contained in INSYNQ's
marketing materials, the Documentation or INSYNQ's standard customer license
agreements; or (ii) a claim that any of VERACICOM's Products infringes any
United States copyright, patent (issued as of the Effective Date), trademark or
trade secret of any third party.
10. LIMITATION OF LIABILITY.
IN NO EVENT SHALL INSYNQ HAVE ANY LIABILITY TO VERACICOM OR ANY THIRD PARTY FOR
ANY LOST PROFITS OR FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES RESULTING
FROM THE USE OF THE SERVICES OR DOCUMENTATION OR THE FAILURE OF THE SERVICES TO
PERFORM, OR ON ANY THEORY OF LIABILITY. THIS LIMITATION SHALL APPLY EVEN IF
INSYNQ HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING
ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY PROVIDED HEREIN. THE
PARTIES AGREE THAT THIS SECTION 10 REPRESENTS A REASONABLE ALLOCATION OF RISK.
11. TERM AND TERMINATION.
11.1 Term. The term of this Agreement shall commence on the Effective Date
and continue for a period of three (3) years unless earlier terminated as set
forth herein. The term of this Agreement shall be automatically extended for an
additional one (1) year period, unless either party notifies the other in
writing a minimum of sixty (60) days prior to the termination date as set forth
herein.
11.2 Termination for Breach or Insolvency. Each party shall have the right to
terminate this Agreement on written notice if (a) the other party ceases to do
business in the ordinary course or becomes insolvent (i.e., unable to pay its
debts in the ordinary course as they come due), or is declared bankrupt, or is
the subject of any liquidation or insolvency proceeding which is not dismissed
within ninety (90) days, or makes any assignment for the benefit of creditors,
or (b) the other party breaches any material term of this Agreement and fails to
cure such breach within thirty (30) days after written notice thereof.
11.3 Effect of Termination. Upon the expiration or termination of this
Agreement:
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(a) INSYNQ shall immediately pay to VERACICOMall License Fees and any other
amounts due to VERACICOM hereunder;
(b) VERACICOM shall, within ten (10) days of such expiration or termination
(i) return to INSYNQ or destroy all Confidential Information and all copies
thereof, of materials received from INSYNQ and for which VERACICOM has not paid
INSYNQ a License Fee; (ii) erase any and all of the foregoing from all computer
memories and storage devices within VERACICOM's or its Licensings' possession or
control; and (iii) provide INSYNQ with a signed written statement certifying
that it has complied with the foregoing obligations.
(c) All rights and licenses granted by INSYNQ hereunder to VERACICOM shall
terminate, provided such termination shall not result in the termination of End
User licenses for copies of the Services which have been purchased by End Users.
(d) INSYNQ agrees that it will offer maintenance and support services to
VERACICOM's End Users and Licensee's after termination on terms substantially
similar to those under which it provides such services to End Users who have
licensed the Services directly from INSYNQ or other VERACICOM Licensees.
11.4 No Liability. In the event of termination by either party in accordance
with any of the provisions of this Agreement, neither party shall be liable to
the other because of such termination for compensation, reimbursement or damages
on account of the loss of prospective profits or anticipated sales or on account
of expenditures, inventory, investments, leases or commitments in connection
with the business or goodwill of INSYNQ or VERACICOM. Termination shall not,
however, relieve either party of obligations occurred prior to such termination.
12. MISCELLANEOUS.
12.1 Assignment. This Agreement will be binding upon and inure to the benefit
of the parties hereto and their permitted successors and assigns. Neither party
may assign or otherwise transfer this Agreement or its rights or obligations
hereunder without the other party's prior written consent, which consent may not
be unreasonably withheld. Any assignment or other transfer without the other
party's prior written consent will be null and void. However, either party may
assign this Agreement without the other party's consent to a third party to
which substantially all of the assigning party's assets are sold, assigned or
otherwise transferred, provided that such third party is not a trustee in a
bankruptcy or a receiver appointed for the benefit of the assigning party's
creditors.
12.2 Waiver and Amendment. No modification, amendment or waiver of any
provision of this Agreement shall be effective unless in writing and signed by
the party to be charged. No failure or delay by either party in exercising any
right, power, or remedy under this Agreement shall operate as a waiver of any
such right, power or remedy.
12.3 Choice of Law; Jurisdiction, Venue. This Agreement shall be governed by
the laws of the State of Washington. For any disputes arising out of this
Agreement, the parties consent to the personal and exclusive jurisdiction of,
and venue in, the state or federal courts within Tacoma, WA.
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12.4 Notices. All notices, demands or consents required or permitted under this
Agreement shall be in writing. Notice shall be considered delivered and
effective when (a) personally delivered; (b) the day following transmission if
sent by confirmed facsimile; or (c) three (3) days after posting when sent by
certified or registered US Mail or by registered private carrier (e.g., DHL,
Federal Express, etc.). Notice shall be sent to the parties at the addresses set
forth on the first page of this Agreement or at such other address as shall be
given by either party to the other in writing.
12.5 Independent Contractors. The parties are independent contractors with
respect to each other. Each party is not and shall not be deemed to be an
employee, agent, partner or legal representative of the other for any purpose
and shall not have any right, power or authority to create any obligation or
responsibility on behalf of the other.
12.6 Severability. If any provision of this Agreement shall be held by a court
of competent jurisdiction to be contrary to law, such provision shall be changed
and interpreted so as to best accomplish the objectives of the original
provision to the fullest extent allowed by law and the remaining provisions of
this Agreement shall remain in full force and effect.
12.7 Complete Understanding. This Agreement, including all Exhibits attached
hereto and hereby incorporated by reference, shall constitute the final,
complete and exclusive agreement between the parties with respect to the subject
matter hereof, and supersedes any prior understandings, proposals, negotiations,
and communications, oral or written, between the parties or their
representatives. This agreement may not be modified except in writing signed by
the duly authorized representatives of the parties hereto.
12.8 Further Assurances. Each party agrees to do and perform all such further
acts and things and shall execute and deliver such other agreements,
certificates, instruments and documents necessary or that the other party may
deem advisable in order to carry out the intent and accomplish the purposes of
this Agreement and to evidence, perfect or otherwise confirm the other party's
rights hereunder.
IN WITNESS WHEREOF, the duly authorized representatives of each of the parties
hereto have executed this Agreement as of the day and year first written above.
INSYNQ, INC. VERACICOM, INC.
By: /s/ Xxx Xxxxxxx By: /s/ X. Xxxxxxxxxxxx
Name: Xxx Xxxxxxx Name: Xxxxxxx (Xxxx) Hjorleifsson
Title: President/COO Title: CTO/Chairman
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EXHIBIT A
INYSYNQ'S SERVICES
InsynQ licenses VERACICOM to promote, resell and distribute the following:
InsynQ's Application Hosting Services
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Application Hosting Services refer to InsynQ deploying applications offered on a
subscription basis by Veracicom to Veracicom's end-user customers including, but
not limited to, Veracicom applications, Microsoft Office Suite, Sun's StarOffice
software, GoldMine! Act, and all other associated applications currently being
hosted by InsynQ.
InsynQ will work with Veracicom in providing them with an updated application
list no less than one time per quarter.
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EXHIBIT B
Veracicom Applications
InsynQ agrees to host all pre-tested Veracicom applications. Untested
applications will be hosted by InsynQ as requested by Veracicom after InsynQ has
tested and certified that additional products work well and meet minimum
performance guidelines on our server farm.
InsynQ's charges for said testing services shall be one hundred fifty ($150)
dollars per hour for each hour of time spent by an InsynQ engineer. There will
be no charge for testing services conducted remotely by Veracicom personnel.
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EXHIBIT C
Royalty and Billing Schedule
InsynQ shall bundle the InsynQ application hosting fee with the subscription
software license fee, as defined by Veracicom. InsynQ will invoice the end-user
customers for the total of the application hosting fee and the subscription
software license fee, and provide payment to Veracicom by the 15/th/ of each
month for the number subscribers in the previous month. Royalty payments to
Veracicom shall be attached with a royalty report showing the name of the
customer, their address and the number of seats being hosted.
InsynQ shall pay to Veracicom the total amount invoiced by InsynQ for the fees
described above, less the applicable InsynQ application hosting fee based upon
the fee schedule below, for each invoiced user. The subscription software
license fee may be revised from time to time by Veracicom, and Veracicom will
notify InsynQ in writing thirty (30) days in advance of any changes in fees.
Number of Seats Per Subscriber Per Month Hosting Fee
0 -- 500 $75.00
501 -- 1,000 $70.00
1,001+ $65.00
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EXHIBIT D
SOFTWARE LICENSE AGREEMENT
ATTACH VERACICOM RESELLER AGREEMENT HERE.
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EXHIBIT E
ROYALTY REPORT
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