Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Exhibit 10.8
SOFTWARE LICENSE AGREEMENT
BETWEEN SUN MICROSYSTEMS INC.
AND
ATG, INC.
No. 99-2006
This Agreement, is made and entered into on and as of the 27th day of March,
1998 ("Effective Date"), by and between Art Technology Group Inc. ("ATG"), a
Massachusetts corporation, having its principal offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and Sun Microsystems, Inc., a
Delaware corporation, ("Sun"), which has its principal place of business at ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
WITNESSETH:
WHEREAS, ATG desires to grant to Sun and Sun desires to acquire from ATG a
non-exclusive right and license to use certain computer software as hereinafter
defined, in accordance with the terms and conditions set forth in this
Agreement; and
NOW THEREFORE, in consideration of the premises, as well as the obligations
herein made and undertaken, the parties do hereby covenant and agree as follows:
1. DEFINITIONS
As used herein, the terms listed below shall have the following meanings:
1.1 "User or User(s)." An individual employed by Sun (whether as
an employee, contractor, consultant) or third party with whom
Sun has contracted to transact substantial business who is
selected by Sun as being entitled to have access to and use
the Licensed Program(s) and Licensed Documentation solely for
the purposes of transacting Sun's business, provided, however,
no party may be a "User" hereunder if Sun charges such User a
fee or royalty for such use.
1.2 "Confidential Information" or "Proprietary Information." Any
and all information disclosed by a party hereunder
("Discloser") to the other ("Recipient") in a written or other
tangible form and which is clearly marked as being
confidential or proprietary. Oral information shall not be
deemed Confidential Information unless it is (a) designated as
Confidential Information by the Discloser at the time of
disclosure, and (b) summarized and identified as being
Confidential Information in a writing, which is received by
Recipient within thirty (30) days after disclosure.
-1-
1.3 "Enhancements." Changes and additions, other than Maintenance
Modifications, to Licensed Program(s) or Licensed
Documentation that adds significant new functions or
substantially improved performance thereto by changes in or
additions to the system design or coding. Enhancements
includes those features and functions that enhance and improve
the capabilities of the existing Licensed Programs. These
include all updates, bug fixes, performance improvements,
screen navigation enhancements, new and expanded functionality
which are consistent with the Licensed Products current and
intended capabilities. In addition they include functionality
which is now part of a product or module specifically
unbundled or marketed separately from the Licensed Programs
where such functionality previously existed in the Licensed
Program(s) and whether or not such functionalities and or
products are marketed under different names or trademarks.
Also included are functionalities and or products that may be
marketed under different names or trademarks or marketed under
new revision release numbers, but which perform or are
intended to perform the same or enhanced functions which a
reasonable person would anticipate to exist in the Licensed
Programs, as well any products which are intended to function
as replacement products to the Licensed Programs, even if such
products include new and or additional functionality so long
as such functionality is not easily separable from the
Licensed Programs.
1.4 "Errors." Problems caused by operation of the computer code of
the Licensed Program(s) or an incorrect statement or diagram
in Licensed Documentation that produces incorrect results or
causes incorrect or unanticipated actions to occur.
1.5 "Licensed Documentation" or "Documentation." The system
documentation and the user manuals currently available from
ATG for the Licensed Program(s).
1.6 "Licensed Program(s)." The computer applications or programs
for which Sun is granted a license to use pursuant to this
Agreement and as described more fully in Exhibit "C",
including all Licensed Documentation currently available and
as updated from time to time hereafter.
1.7 "Licensed Product(s)." All Licensed Program(s), Licensed
Documentation, Enhancements, and Maintenance Modifications.
1.8 "Maintenance Modifications." Modifications or revisions to the
Licensed Program(s) or Licensed Documentation that correct
Errors therein.
-2-
1.9 "Notice." The formal notification required to be given in
specified circumstances by one party to another.
1.10 "Solaris." Sun's UNIX operating system used by Sun for its
internal use purposes.
1.11 "Specifications." The functional performance parameters of
the Licensed Program(s) as further described in Exhibit "A."
1.12 "Sun's Hardware Platform." The then current hardware
platform(s) on which Sun runs the Licensed Program(s)
(including, but not limited to Sun's Unix and Sun's Java
hardware platforms).
1.13 "Support Services." Services in support of the Licensed
Program(s) provided by ATG to Sun after installation, as more
particularly described in Exhibit "B."
2. GRANT OF LICENSE
2.1 Scope of License. ATG grants to Sun for each Licensed
Program(s) for which Sun has paid to ATG the applicable
license fees a NONTRANSFERABLE and NONEXCLUSIVE, worldwide,
fully paid-up, perpetual right and license to:
a. install, display, use and execute the Licensed Program(s)
in machine readable form in support of the business
activities of Sun in the quantities specified in Exhibit
"C."
b. use the Licensed Documentation but only in conjunction
with installation, use and support of the Licensed
Program(s).
c. use all human language versions (including, but not
limited to all double-byte enabled language versions),
should ATG produce commercial non-English language
versions of the Licensed Program(s) now or in the future,
on all operating systems, on any hardware platform
(including, but not limited to, Intel, Solaris x86,) of
the Licensed Program(s), as permitted by section 2.1(a)
above if and when ATG makes such language versions and or
operating systems for the Licensed Program(s) available to
the general marketplace. If the applicable license fees in
Exhibit C have been paid, this right entitles Sun to
choose single or multiple language and operating system
versions of the Licensed Program(s) at the time of initial
purchase and includes the right to substitute or exchange,
in quantities and mix to be determined by Sun, previously
purchased language and or operating
-3-
system versions of the Licensed Program(s) for another
language and or operating system version of the Licensed
Program(s) at any time after initial purchase. In such
event, ATG shall credit Sun with the full purchase price
Sun paid for a version of the Licensed Program that Sun
exchanges against the then-applicable license fees for the
new version of the Licensed Programs that Sun elects to
receive.
d. use the Licensed Program(s) as permitted by 2.1(a) above
by Sun's wholly owned or majority owned subsidiaries and
any joint venture entity in which Sun Microsystems, Inc.
or its Subsidiary holds an interest equal to or greater
than fifty one percent (51%) of the total capital of such
entity provided, however, that Sun shall cause each of
the parties described herein to adhere to the obligations
of Sun in protecting and observing the rights of ATG as
set out in this Agreement.
2.2 Rights to Copy.
a. Upon Sun's payment of the applicable one-time fee for
Documentation and Training Materials as described in
Section 6.0 of Exhibit C, ATG grants to Sun the right and
license to copy (subject to the terms of Article 7 herein)
of all such Documentation and Training Materials.
Two copies of Documentation shall be supplied by ATG in
photo ready form (on 8.5" by 11" sized paper), or other
mutually agreed form for each of the Licensed Program(s)
licensed to Sun hereunder. From time to time ATG may
create updated Training Material related to the Licensed
Program(s) covered by this Agreement. Sun shall be
entitled to two copies of the Training Material in photo
ready form or electronic form at no additional cost to
Sun. Sun shall reproduce ATG's copyright notice, where it
appears on originals supplied by ATG, on all reproduced
pages on all such Documentation copied by Sun. ATG
further agrees to grant Sun the right to customize such
Documentation and or Training Material as necessary for
Sun to train its Users.
b. Sun's rights to use and copy Documentation and training
material are concurrent with Sun's rights to use the
Licensed Program(s), if the applicable license fees have
been paid.
2.3 Backup and Distribution Copies.
a. Sun is granted the right to make backup copies of the
Licensed Programs and to copy the Licensed Programs on to
servers as deemed necessary by Sun to facilitate access to
the Licensed Programs by its Users so long as the total
number of servers and CPU's on which the
-4-
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Licensed Programs run doesn't exceed the number for which Sun
has purchased licenses. Such copies shall not be considered a
use of the Licensed Programs and shall not be included in
counts used to determining the number of the Licensed Programs
in use at Sun. Sun shall not use such copies to circumvent in
any way the limitation on the number of copies of the Licensed
Program(s) licensed by ATG for use by Sun hereunder.
2.4 Tracking of Licensed Programs.
a. The number of Licensed Programs shall be determined by
counting the number of servers and CPU's on which the
Licensed Programs run. Sun shall use reasonable efforts to
track usage. It is agreed that Sun will provide reasonable
access to ATG, in accordance with Sun's security
regulations, within 30 days after receipt of a written
request from ATG, but in no event shall such request be
made by ATG more than twice in a calendar year.
b. In the event that it is determined that Sun has exceeded
the number of authorized servers and CPU's on which the
Licensed Programs are installed, Sun shall have the right
to either immediately terminate such usage, at no cost to
Sun, or to purchase additional Licensed Programs for such
usage in accordance with the terms of this Agreement.
2.5 Solaris Commitment.
a. ATG shall and hereby agrees to use its best efforts to
maintain binary compatibility with Sun's Solaris operating
system, Sun's Hardware Platform(s) and the current release
of Java, for a minimum period of [**] from the Effective
Date of this Agreement. ATG shall use its commercially
best efforts to maintain such compatibility within [**]
after Sun releases updates, upgrades, or such new
operating system and Sun Hardware platform(s) to the
general marketplace.
b. ATG agrees to use reasonable efforts to maintain the
compatibility of its Licensed Product(s) running on
Solaris with the Licensed Products running on other
operating systems and shall use reasonable efforts to
release all Enhancements on Solaris within [**] after
release of such Enhancements on other operating systems
for a minimum period of [**] from the Effective Date of
this Agreement.
-5-
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
2.6 Source Code in Escrow.
a. No rights are granted or licensed hereunder with respect
to the Source Code for the Licensed Program(s), except
that ATG shall, at Sun's Notice, place one copy of the
Source Code for the Licensed Program(s) and Source
Documentation with an escrow agent chosen by ATG and
deemed acceptable by Sun, who shall be directed to
release a copy of the Source Code and Documentation to
the Licensed Program(s) to Sun, at Sun's expense, upon
the occurrence of any of the events described in section
2.6(b), below. Upon occurrence of an event described in
section 2.6(b), below, Sun shall have a nonexclusive
right to use, modify and make working copies of the
Source Code and Documentation solely for the purposes of
supporting and maintaining the Licensed Program(s) and
subject to the restrictions set forth in this Agreement.
b. Access to such escrowed Source Code and Documentation
shall, however, not be available to Sun until such time as
ATG shall (i) fail to supply Support Services for a period
of three (3) consecutive months (ii) voluntarily terminate
its business operations; (iii) file a voluntary petition
for bankruptcy.
2.7 Contractors and 3rd Party Business Partners. The right and
licenses granted to Sun herein to use the Licensed Program(s)
shall permit the use of the Licensed Program(s) by
contractors, subcontractors and third party business partners
of Sun, provided that such Licensed Program(s) are used solely
for business services to be provided exclusively to Sun by
such contractors, subcontractors and third party business
partners of Sun.
3. SUPPORT AND MAINTENANCE
3.1 For as long as ATG continues to offer Support Services to its
other customers in general and Sun remains current in its
payment obligations hereunder, ATG shall offer Support
Services to Sun pursuant to provisions of Exhibit B.
3.2 As long as Sun pays the applicable annual Support Services
fees, ATG shall support the current and at least one prior
release of the Licensed Program(s). ATG's responsibility to
support the prior release of the Licensed Programs shall end
[**] following delivery to Sun of the current release version
of the Licensed Program(s). Such Support Services shall, at a
minimum, be in accordance with the Support Services described
in
-6-
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Exhibit B hereof, including porting of all major and minor bug
fixes, Maintenance Modifications as well as all major and
minor releases of Enhancements or updates. Sun shall, under no
circumstances, be denied the right to purchase Support
Services in accordance with Exhibit B, as long as ATG
continues to offer any kind of Support Services to its other
customers for the type of Licensed Program(s) licensed under
this Agreement.
3.3 ATG agrees to continue to offer Support Services for the
Licensed Program(s), running on the operating systems and
platforms as described in Section 2.5 and all of Section 5
herein, for a minimum of [**] from the Effective Date of this
Agreement.
3.4 In the event that ATG materially fails for a period of [**] to
provide Support Services where there is a continuing agreement
between the parties for ATG to provide Support Services for
the Licensed Programs(s) and upon written Notice to ATG that
such condition exist, Sun shall have the right to receive a
copy of the source code in escrow and any other tools,
technical documentation or additional source code, whether
partially or fully complete, then in the possession of ATG or
its escrow agent which may be necessary for Sun to fully
maintain and support the Licensed Program(s). In the event ATG
corrects the conditions described in Section 2.6(b) above, Sun
shall return the Source Code to ATG and shall have no further
rights to utilize the Source Code.
3.5 For a period of [**] from delivery of any modification work
performed by ATG on behalf of Sun, if ATG releases a new
version or release of the Licensed Program(s) which renders
any such modification work inoperable or unusable, including
any significant reduction in performance levels, (collectively
"Errors") then, in such an event, ATG commits to correct such
Errors in accordance with the commitment level prescribed in
Sections 2A, 2B and 2C of the Professional Service Agreement
No. 99-0013, dated March 27, 1998, attached hereto as Exhibit
D and incorporated herein by this reference.
3.6 In the event that Sun determines that category "X" or "A"
Errors, as defined in Section 1.8 of Exhibit B, exist in the
Licensed Program and where ATG cannot duplicate and or resolve
such Errors remotely from ATG's support center, ATG commits to
deliver support personnel on-site at Sun, upon requested by
Sun. ATG shall be reimbursed only for its reasonable
out-of-pocket costs in providing such support on-site at Sun.
-7-
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
3.7 ATG agrees to supply Sun with beta versions of new releases of
the Licensed Program(s) as they become available on an "as-is"
(no warranty) basis and to keep Sun informed of ATG's JAVA
developments. In addition, ATG agrees to give Sun updates and,
where requested by Sun, presentations on ATG's development
plans[**] starting with the Effective Date of this Agreement.
3.8 Availability of ATG Enhancements. If there is not an ongoing
agreement between the parties for Support Services, ATG agrees
to offer to Sun a license for Enhancements that ATG develops
and offers generally to its other users of the Licensed
Program(s) at the Support Service fees set forth in Exhibit C
hereto or such other terms as may be agreed upon between the
parties, for such Enhancements. ATG shall advise Sun of the
availability of any such Enhancements and of the license terms
available for such Enhancements at such time as ATG makes
Enhancements generally available to its other customers or the
marketplace in general.
3.9 ATG agrees and acknowledges that Sun's ongoing ability to
obtain Support Services for the Licensed Program(s) from ATG
in accordance with this Article 3 is a major inducement to Sun
entering into this Agreement.
4. DISABLING CODE
4.1 ATG warrants that no disabling code currently exists in the
Licensed Programs which would enable ATG to prevent Sun from
enjoying the full benefit of the Licensed Programs permitted
herein. To the extent any ATG Licensed Program(s) delivered to
Sun in the future may contain such disabling ability, ATG is
authorized to use such code solely to limit access to the
Licensed Program(s) to the authorized number of ATG servers
purchased by Sun. ATG shall not use such disabling code to
enforce compliance with a term or condition of this Agreement
absent a court order authorizing such action. ATG, at its sole
discretion, may include software code to limit the users of
the Licensed Programs to a particular servers, subject only to
any necessary restrictions required by Sun to meet its network
security requirements.
Any improper use of the disabling code shall entitle Sun to
obtain direct damages beyond the limitations of Article 10
herein.
-8-
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
5. JAVA COMMITMENT
5.1 For a period of [**] from the Effective Date of this Agreement
and provided that Sun has not defaulted on payment of Support
Services and further provided that Java remains competitive in
the marketplace, ATG shall use best efforts to ensure that all
Licensed Product(s) support Java such that ATG's server-based
portions are written in Java code.
5.2 ATG acknowledges Sun's right to develop and build applications
that will reside on top of the Licensed Program(s). ATG
acknowledges Sun's right to use and exploit such applications
including the right to market such applications to 3rd party
customers, at no cost to Sun. Nothing in the foregoing
statement shall be construed as giving Sun the rights to
exploit or market for resale any of the underlying Licensed
Program(s) except as specifically described elsewhere in this
Agreement.
5.3 Upon delivery of a Java based version of the Licensed
Program(s), ATG agrees to use best efforts to maintain binary
compatibility with the then current release of Sun's Java
Virtual Machine and to offer Support Services for the Java
based version, for a minimum of [**] from the Effective Date
of this Agreement.
6. LICENSE FEES AND PAYMENTS
6.1 License Fee. In consideration of the licenses granted and
Support Services provided hereunder, Sun shall pay to ATG the
fees and charges specified in Exhibit C hereto.
6.2 Ordering Procedure.
a. Sun may from time to time issue individual purchase orders
to ATG to obtain licenses (upon payment of the applicable
fees) for the Licensed Program(s), Support Services,
Training, and Consulting Service. Such purchase(s) order
shall set out the applicable fees, payment terms, and
other pertinent information and shall incorporate the
terms of this Agreement by reference. Sun's purchase
orders are subject to acceptance by ATG.
b. ATG agrees to tender a prompt, formal acknowledgement to
each purchase order awarded by Sun and accepted by ATG
pursuant to this Agreement. Any additional or different
terms or conditions contained
-9-
in such acknowledgement form shall not become a part of
this Agreement.
6.3 Taxes. Unless indicated in Exhibit C or in an applicable
purchase order, fees and charges are exclusive of any federal,
state, or local excise, sales, or use taxes. Sun shall be
responsible for such taxes when they are properly itemized on
ATG's invoice and are submitted to Sun at the time of original
purchase only. Sun shall not be responsible for any taxes
based on ATG's net income.
6.4 Payment terms are net 30 days from the date of invoice
referencing a Sun issues purchase order number, or in
accordance with such other terms as may be listed in Exhibit
C. Sun shall pay interest at a rate equal to the lesser of one
percent (1%) over the then current prime rate quoted by
Citibank, or the maximum rate allowed by law, which ever is
less, on overdue payments not made by Sun on correct invoices.
Interest shall not be due unless Sun fails to cure the default
condition within thirty (30) days after receipt of Notice that
such condition exist. ATG shall be required to deliver one (1)
Notice to cure, which shall be deemed sufficient notice for
the current and any subsequent overdue payments.
6.5 Sun shall not be required to pay the disputed portion of any
invoice, pending resolution of such dispute, provided that
Notice of the dispute has been sent to ATG.
6.6 All invoices shall reference a valid Sun purchase order and
shall be sent to the following address:
Sun Microsystems, Inc.
Accounts Payable Department
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
7. DELIVERY AND INSTALLATION
7.1 The Licensed Product(s) shall be deemed "delivered" for
purposes of this Agreement upon delivery of the Licensed
Program(s).
7.2 ATG shall deliver the Licensed Program(s) and Documentation
listed in Sec. 1 of Exhibit C promptly upon execution of this
Agreement or on such other dates listed in Exhibit C.
-10-
7.3 All Licensed Program(s) and related documentation shall be
shipped to the following address or to such other address as
Sun may designate in writing to ATG.
Sun Microsystems Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
Mail Stop:
8. ACCEPTANCE
Acceptance shall be effected upon delivery of the Licensed Program(s)
to Sun at the address shown in Section 7.3 above.
9. CONFIDENTIALITY & PROTECTION OF PROPRIETARY MATERIALS
9.1 Acknowledgment of Proprietary Rights.
a. Sun acknowledges ATG's claim that ATG holds all right,
title, and interest in and to the Licensed Program(s) and
Documentation, including any patents, trade secrets,
trademarks and copyrights pertaining thereto.
9.2 Restrictions on Use, Copying and Disclosure.
a. The recipient of Confidential Information shall neither
disclose Discloser's Confidential Information to any third
party, nor use the same for any purpose other than as set
forth in this Agreement. Recipient shall use the same
degree of care as it uses to protect its own confidential
information, but no less than reasonable care, to prevent
the unauthorized use, dissemination or publication of the
Confidential Information.
b. In addition to Recipient's right to disclose Confidential
Information to its employees, Recipient shall have the
right to disclose Confidential Information to any
contractor or agent of Recipient or any employees,
contractors, or agent of any majority-owned subsidiary of
Recipient who have executed and delivered to recipient a
confidentiality agreement containing terms and conditions
substantially similar to those stated herein. Recipient
will promptly advise Discloser of any unauthorized
disclosure or use of Discloser's Confidential Information
by any person.
-11-
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
c. This Agreement imposes no obligation upon Recipient with
respect to Confidential Information which: (a) was in the
possession of, or was known by Recipient without an
obligation to maintain its confidentiality prior to its
receipt from Discloser, (b) is or becomes generally known
to the public without violation of this Agreement by
Recipient, (c) is obtained by Recipient from a third
party, without an obligation to keep such information
confidential, or (d) is independently developed by
Recipient without use of the Confidential Information.
d. Disclosure of Confidential Information will not be
prohibited, if Recipient gives Discloser prior Notice and
such Disclosure is: (a) compelled pursuant to a legal,
judicial, or administrative proceeding, or (b) otherwise
required by law.
9.3 Proprietary Legends. Sun may reproduce for internal
distribution and internal use only and include on all copies
of the Documentation all proprietary and copyright notices or
legends of ATG as they now appear or as ATG may in the future
furnish to Sun on the Documentation and on the media, manuals,
and packaging containing the Documentation.
9.4 Survival of Obligation. Recipient's duty to protect
Confidential Information received under this Agreement shall
expire [**] from the date of termination of this Agreement.
10. LIMITED WARRANTY, LIMITATION OF LIABILITY AND INDEMNITY
10.1 PATENTS & COPYRIGHTS. ATG warrants that ATG has the right and
title to the Licensed Program(s) & Licensed Documentation, and
ATG has the legal right to sell licenses or sublicense the
Licensed Program(s) & Licensed Documentation, and the licenses
sold hereunder do not infringe upon or violate any published
U.S. patents, copyrights, knowingly violate any trade secrets
or other proprietary right of any third party. In the event of
any breach of the foregoing warranties:
ATG shall defend, indemnify and hold harmless Sun against any
such claim of direct or contributory infringement or
violation, and ATG shall pay resulting costs, damages and
attorney's fees finally awarded, provided that:
(i) Sun promptly notifies ATG in writing of the
claim; and
-12-
(ii) ATG has control of the defense and all related
settlement negotiations, provided however that Sun must
approve in writing any settlements before they are
executed, and
(iii) Sun fully cooperates with ATG, at ATG's cost,
in the defense or settlement of such actions.
ATG's obligation under this Article is conditioned on Sun's
agreement that if the Licensed Program(s), or the use or
operation thereof, becomes, or in ATG's opinion is likely to
become, the subject of such a claim, Sun will permit ATG at
ATG's option and expense, either to procure the right for Sun
to continue using the Licensed Program(s) or to replace or
modify the same so that it becomes non-infringing. If neither
of the foregoing alternatives is available on terms which are
reasonable in ATG's reasonable judgment, Sun will return or
destroy the Licensed Program(s) on written request of the ATG.
ATG shall pay to Sun for the returned Licensed Program(s) an
amount equal to the License Fee paid for the Licensed
Program(s) less an amount equal to depreciation on such
Licensed Program(s) determined on a straight line three (3)
year basis commencing on the Effective Date of this Agreement.
THE FOREGOING STATES THE ENTIRE OBLIGATION OF ATG WITH RESPECT
TO INFRINGEMENT OF PATENTS, COPYRIGHTS, TRADE SECRETS AND
OTHER PROPRIETARY RIGHTS.
10.2 LIMITED WARRANTY ON CONFORMITY TO ATG'S PUBLISHED
SPECIFICATIONS. ATG warrants that for a period of ninety (90)
days from the date of Acceptance of the Licensed Program(s) as
described in Article 8 herein, (1) the Licensed Program(s)
will be free of material defects in materials and workmanship
under normal use; and (2) the Licensed Program(s) contains the
features described in the Specifications documentation
described in Exhibit A hereto. Otherwise the Licensed
Program(s) are provided "As is." This warranty extends only to
Sun as the original Licensee of the Licensed Program(s).
10.3 EXCLUSIVE REMEDY OF NONCONFORMITY TO ATG'S PUBLISHED
SPECIFICATIONS. As the exclusive remedy of Sun for any
nonconformity to ATG's published specifications or defect
constituting an Error in the Licensed Program(s). ATG shall
use reasonable commercial efforts to provide Maintenance
Modifications to correct such Error. If ATG cannot cure such
Errors within ninety (90) days of Notice, ATG agrees to refund
to Sun the total of all dollars paid by Sun to ATG on or after
the Effective Date of this Agreement. However, ATG shall not
be obligated to correct, cure, or otherwise remedy any Error
in the Licensed Program(s) resulting
-13-
from any (i) modifications to, misuse of or damage to the
Licensed Program(s) other than by authorized users of Sun, or
(ii) failure of Sun to provide Notice to ATG of the existence
and nature of such nonconformity or defect within ninety (90)
days from its discovery.
10.4 WARRANTY OF NO VIRUSES. ATG warrants and represents that it
used its best efforts in the development of proprietary
elements of Licensed Program(s) ("Proprietary Software") to
ensure that no viruses were coded into or introduced during
the development. Should a virus be found to have emanated from
the Licensed Program(s), ATG shall, at its own expense, use
best efforts to cure the virus. In the event the virus causes
actual loss of operational efficiency or loss of data, and
provided that Sun has taken reasonable efforts to test the
Licensed Program(s) for viruses prior to its distribution to
Sun's end users, ATG shall use best efforts to assist Sun and
to restore Sun to its original operating efficiency.
10.5 YEAR 2000 COMPLIANCE. ATG warrants that the Licensed
Program(S) are fully Year 2000 Compliant and that the internal
data handling will have no problems with the year 2000 or
beyond. For the purposes of this article "Year 2000 Compliant"
shall mean: "The capability for the Licensed Program(s), when
used in accordance with the Product Documentation, to
correctly process, provide and/or receive date data within and
between the twentieth and twenty-first centuries. Within the
limits of Java, year 2000 Compliance includes, but is not
limited to, date and century recognition before and after
January 1, 2000, calculations to accommodate same century and
multi-century formulas and date values, and date data
interface values that reflect the century. In addition, leap
year calculations must be accommodated and must not result in
erroneous results or system failures."
10.6 DISCLAIMER. ALL EXPRESS OR IMPLIED CONDITIONS, REPRESENTATIONS
AND WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE ARE HEREBY
DISCLAIMED, EXCEPT AS SPECIFIED IN THIS AGREEMENT OR WHERE
SUCH DISCLAIMERS ARE HELD TO BE LEGALLY INVALID.
10.7 Limitation on Liability. Except with respect to the liability
of ATG under Articles 4 and 10, ATG shall not be liable to Sun
under any claim, demand, or action arising out of or relating
to ATG's performance or lack thereof under this Agreement for
any special, indirect, incidental, exemplary, or consequential
damages, whether or not ATG has been advised of the
possibility of such claim, demand, or action.
-14-
11. TERM AND TERMINATION/SURVIVAL CLAUSE
11.1 This Agreement will come into force on the Effective Date and
will remain in effect until terminated in accordance with the
provisions of Article 11.2 below.
11.2 Termination by ATG. ATG may terminate this Agreement upon
thirty (30) days written Notice to Sun for failure to pay the
applicable License Fees, provided Sun fails to cure such
condition within thirty (30) days of receipt of Notice that
such condition exists for the first time ATG notifies Sun of
this condition.
11.3 Termination by Sun. Sun may terminate this Agreement for
convenience upon written Notice to ATG.
11.4 Rights and obligations under this Agreement which by their
nature should survive, including, but not limited to any and
all payment obligations invoiced prior to the termination or
expiration hereof, will remain in effect after termination or
expiration hereof.
12. NOTICES
Any provision of this Agreement that requires Notice from one party to
the other will be satisfied if, without exception, the Notice is given in
writing and delivered to the following address by a means evidenced by a signed
delivery receipt of which a legible copy is furnished to the receiving party.
Such notice will be effective upon receipt:
ATG: Sun:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇. Sun Microsystems, Inc.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Attn: Vice President, Finance ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇ Attn: Software Commodities Mgr.
Each party shall inform the other in writing of any change in the
foregoing address information.
13. ASSIGNMENT
No assignment, delegation or other use of any right or duty under this
Agreement may be made by either party without the prior written consent of the
other party, other than by a purchaser of all or substantially all of the stock
or assets of the assigning party or to a third party pursuant to a merger, or
other corporate reorganization, provided that the assignee is capable of
fulfilling and indicates in writing its intent to fulfill the obligations of the
assigning party under this Agreement. Any other such assignment or
-15-
delegation, or other transfer of interest attempted to be made without such
written consent shall be void for all purposes.
14. INVALID PROVISIONS
If any provision of this Agreement is declared to be invalid under any
applicable statute or rule of law, the parties agree that such invalidity shall
not affect the remaining portions of this Agreement.
15. ATTORNEY'S FEES
In the event that suit is brought under this Agreement, reasonable
attorney's fees and expert witness fees, as fixed by a court of competent
jurisdiction or duly appointed Arbitrator, shall be awarded to the prevailing
party.
16. TIMELY CLAIMS
No action for breach of this Agreement or any other action to enforce
any claim arising out of or in connection with the subject matter of this
Agreement shall be brought by either Party more than two (2) years after the
cause of action has occurred.
17. WAIVER
Any waiver of any provision of this Agreement, or a delay by either
party in the enforcement of any right hereunder, shall neither be construed as a
continuing waiver nor create an expectation of non-enforcement of that or any
other provision or right.
18. COMPLIANCE WITH U.S. EXPORT LAWS
Sun acknowledges that the laws and regulations of the United States
restrict the export and re-export of commodities and technical data of United
States origin, including the Licensed Program(s) and related Documentation. Sun
agrees that it will not export or re-export the Licensed Program(s), or related
Documentation in any form without the appropriate United States and foreign
government licenses. Sun agrees that its obligations pursuant to this Article
shall survive and continue after the termination or expiration of this
Agreement.
19. AMENDMENTS
No waiver, alteration or modification of any of the provisions of this
Agreement shall be binding unless in writing and signed by a duly authorized
representative of the party to be bound thereby.
-16-
20. CHOICE OF LAW
The rights and obligations of the parties hereto shall be construed
under and be governed in all respects by the laws of the State of California
without giving effect to principles of conflict of law.
21. PUBLICITY
Neither party shall publish or make known to others the subject matter
of this Agreement or any information obtained in connection therewith which is
proprietary and confidential to the other party without first obtaining the
prior written approval of the affected party, which shall not be unreasonably
withheld. No advertising or publicity containing any reference to either party
or any of its employees, either directly or by implication, shall be made use of
by the other party without first obtaining prior written approval of the
affected party. Such approvals shall be obtained in accordance with the
provisions of Article 12 ("Notices").
22. HEADINGS NOT CONTROLLING
Headings used in this contract are for reference purposes only and
shall not be deemed a part of this Agreement.
23. FORCE MAJEURE
Excepting provisions of this Agreement relating to payment of invoices,
neither party shall be in default of the terms hereof if such action is due to a
natural calamity, act of government, or similar causes beyond the control of
such party.
24. OVERALL LIMIT OF LIABILITY
ATG's overall limit of liability to Sun related to the use of the
Licensed Software, shall not exceed the amounts paid to ATG, by Sun, for
Licensed Program(s).
25. ENTIRE AGREEMENT
The provisions herein constitute the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
agreements, oral or written, and all other communications relating to the
subject matter hereof. No amendment or modification of any provision of this
Agreement will be effective unless set forth in a document that purports to
amend this Agreement and that is executed by both parties hereto.
The following documents and the terms contained therein are
incorporated herein by this reference:
-17-
Exhibit A, "Product Specifications"
Exhibit B, "Support Services"
Exhibit C, "Fees and Charges"
Exhibit D, "Professional Service Agreement No.
99-0013"
In the event of a conflict between the terms contained in the above
listed Exhibits and the terms contained in this Agreement, the terms contained
in the Exhibit shall supersede the conflicting terms of this Agreement.
The parties acknowledge they have read this Agreement and understand
and agree to be bound by its terms and conditions.
IN WITNESS WHEREOF, the parties to this Agreement execute it through
their duly authorized representatives.
Sun Microsystems, Inc. Art Technology Group, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------- ----------------------------------
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------- ----------------------------------
(Print Name) (Print Name)
Title: GLOBAL COMMODITY MANAGER Title: DIRECTOR OF WORLDWIDE SALES
------------------------- ------------------------------
Date: 3/27/97 Date: 4/2/98
--------------------------- -------------------------------
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Exhibit A
PRODUCT SPECIFICATIONS
The specifications for the Licensed Program(s) shall be those contained in ATG's
published technical documentation supplied with the Licensed Programs and as
contained in such updated documentation as published by ATG from time to time
hereafter.
-19-
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Exhibit B
SUPPORT SERVICES
1.0 Responsibilities of ATG:
ATG shall deliver the following items and provide the following Support
Services, subject to Sun's payment of the annual Support Services fees set forth
Exhibit C
1.1 ATG shall provide known problem solutions to Sun relating to
the Licensed Program(s) as such problems are reported by Sun
to ATG.
1.2 ATG shall provide to Sun all updates, bug fixes, changes,
Maintenance Modifications and Enhancements to the Licensed
Programs(s) which are released by ATG to its other customers
or the general marketplace.
1.3 ATG shall continue to support the Licensed Program(s) on
Solaris for a minimum period of [**] from the Effective Date
of this Agreement. ATG shall continue to supply Support
Services for Solaris after[**] ATG will use its best efforts
to initiate Support Services for major new versions of
Licensed Program(s) on Solaris within [**] of the general
availability release of Sun's new versions of Solaris.
1.4 Except as limited by 1.3 above, ATG shall provide to Sun at
least [**] written notice prior to the discontinuance of
support services for any Licensed Program(s) licensed to Sun
hereunder. IN THE EVENT ATG DISCONTINUES SUPPORT SERVICES FOR
THE LICENSED PROGRAM(S) RUNNING ON ANY SUN HARDWARE PLATFORM
OR SUN OPERATING SYSTEM WITHIN THE [**] FROM THE EFFECTIVE
DATE OF THIS AGREEMENT, [**].
1.6 ATG shall use reasonable efforts to release all bug fixes,
Maintenance Modifications and all Enhancements for use on
Solaris within [**] of ATG's release to the general
marketplace or to any of its other customers of such bug
fixes, Maintenance Modifications and Enhancements on operating
systems other than Solaris.
-20-
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
1.8 ATG will use reasonable efforts to respond to problems/queries
in accordance with the response times listed herein. ATG shall
make available a reasonable number of technical consultants so
as to ensure that the response times listed below are be
maintained.
RESPONSE TIME
--------------------------------------------------------------------------------
CLASSIFICATION FIRST LEVEL SECOND LEVEL FINAL LEVEL
------------------------------------------------------------------------------------------------------------
Severity Critical [**] [**] [**]
Severity High [**] [**] [**]
Severity Medium [**] [**] [**]
Severity Low [**] [**] [**]
The response times listed above shall not include the time spent by ATG in
determining whether the reported problem is a result of a bug or error in the
Licensed Program(s) or a site specific implementation problem.
CLASSIFICATION
--------------------------------------------------------------------------------
The Errors are classified by Sun as follows:
Critical = Fatal: Production server down. Production data loss or corruption.
High = Severe performance/load issues in production. Repeated reboots of the
system in production. Major functionality failure. Install problems for
evaluation customers.
Medium = Critical or high severity problem for which a workaround has been
found, which workaround is shown NOT to impact functionality or performance of
the product. Loss of a function that affects customers schedule.
Low = All other problems or "how to" questions.
-21-
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
The remedies for each Error classification at each level specified above are:
REMEDY LEVEL
--------------------------------------------------------------------------------
First Level: Verbal acknowledgement of a problem query shall include problem
report number and the remedy, if available, therefor shall be delivered to Sun
within [**].
Second Level: Patch or work around, temporary fix, or update or major release,
including applicable documentation.
Final Level: Official fix, update or major release, including applicable
documentation changes.
* If received on a business day during the hours at ATG's local support offices
or in the case of ATG's California Support office if any, Monday through Friday,
from 9:00 a.m. to 7:00 p.m. Eastern Standard Time, excluding observed holidays;
otherwise, times commence on the next business day. NOTE: It is understood by
Sun that ATG does not have a worldwide localized support organization. ATG
commits that as, and if, this organization is expanded worldwide, Sun shall be
entitled to access all new support centers as they are opened at no additional
cost to Sun beyond the payments of Sun's standard Support Service payments as
described in Section 4.0 of Exhibit C herein.
Note: A day is defined as a 24-hour period, regardless of whether work is
scheduled during that period.
1.9 ATG commits that ATG or ATG's authorized distributors and or partners
shall supply the Support Services described in Articles 1.1 through 1.8
above to all Sun locations worldwide when requested by Sun authorized
named service contacts (the number of named service contacts are
defined in Exhibit C attached hereto).
-22-
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Exhibit C
FEES AND CHARGES
1.0 Sun's initial purchase shall consist of the following:
SOFTWARE PRODUCT QUANTITY SUN PRICE TOTAL COST
---------------- -------- --------- ----------
(Per Server)
1) Profile Station [**] [**] [**]
2) Additional 4 CPU/server [**] [**] [**]
Sub Total [**]
3) ID Address:
[**] [**] [**] [**]
[**] [**] [**] [**]
[**] [**]
[**] [**]
Total Production Server Cost [**]
4) Staging Server
Profile Station [**] [**] [**]
ID Address:
[**]
[**] [**]
Total Staging Server Cost [**]
5) Development Server
Dynamo Application Server [**] [**] [**]
Profile Station [**] [**] [**]
Total Software Costs, initial purchase [**]
* [**] to Sun.
** Note: Sun is granted a right to an unlimited number of user accesses
to any and all servers purchase by Sun.
-23-
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
2.0 Additional Product Purchases:
Sun is granted the right to purchase additional quantities of the
Licensed Products listed in Section 1.0 above as well as the following
additional products:
COST/SERVER
Dynamo Application Server [**]
Profile Station [**]
Additional CPU's for above products [**]
Retail Station [**]
'Ad Station [**]
Affiliate Kit [**]
o For the first [**] of Sun purchases the discount shall be [**] off
the Cost/Server prices shown above and in Section 2.0 above. (Note: Dynamo and
Profile come with [**] included in above pricing). Thereafter the discount shall
be [**] off of the pricing shown above. The calculation of total dollars spent
shall be based upon the total spending for any ATG license product and
additional servers. The [**] threshold is based upon the cumulative spending of
Sun and all its subsidiaries from the Effective Date of this Agreement through
December 31, 1999. The above pricing is fixed through December 31, 1999 and is
available for Sun's use worldwide.
o Once Sun has purchased [**], Sun shall have the right to [**]. Sun is
granted a right to an unlimited number of user accesses to any and all servers
purchased by Sun.
3.0 Development and Production Servers:
Sun is granted the right to [**].
Sun is granted the right to purchase "Staging Servers" (as used herein
Staging Servers are defined as "a dedicated server used to test software prior
to the software being placed into live production") at a discounted price of
[**] off the pricing shown for the Dynamo Server in Section 1.0 above, provided
however that Sun maintains the CPU limit for such servers at one (1) CPU.
-24-
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
4.0 Support Services:
a) Normal Business Hours (6:00 a.m. to 5:00 p.m. PST Monday through
Friday, excluding holidays). Cost of annual Support Services for the
Licensed Program(s), including all Enhancements, and Maintenance
Modifications shall be fixed at an annual rate of [**] of Sun's cost of
licenses purchased. SUPPORT SERVICE FEES SHALL NOT BE DUE AND PAYABLE
BY SUN UNTIL SUCH TIME AS ATG DELIVERS THE LICENSED PROGRAM(S) TO SUN.
This rate also includes Sun's right to unlimited worldwide support
contacts, who shall be authorized to directly contact any ATG
authorized support centers, worldwide, during normal business hours,
excluding holidays. This rate shall be fixed for a period of [**] from
the Effective Date, and for each year thereafter the rate may be
adjusted [**].
b) After Hours, Weekend and Holiday Support. For the [**] from the
Effective Date of this Agreement, ATG agrees to transfer [**] from cost
related to the first Statement of Work supplied with the Professional
Service Agreement No. 99-0013, dated March 27, 1998, to cover the [**]
annual fee for twenty four hour, seven day support coverage. In
addition, Sun agrees to pay [**] per hour, chargeable in half hour
increments per call made. For years [**], Sun shall have the option of
contracting for After Hours support on a yearly basis at the above
rates. These rates and this option shall be available to Sun to use at
anytime during the [**] from the Effective Date of this Agreement.
Should Sun decided to renew this Support Service option for After Hours
support, the annual fee of [**] is due ATG at the anniversary date of a
new year from the Effective Date of this Agreement.
5.0. Consulting Services:
ATG agrees to supply any mutually agreed to consulting services, when
requested by Sun at rates shown below. These rates shall be available to Sun,
worldwide during the first three years from the Effective Date of this
Agreement. Note: These rates are only available to Sun on time and materials
engagement (not fixed fee proposals). Fixed Price engagement cost shall be
negotiated by Sun and ATG on a case by case basis.
-25-
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Fixed Rates for ATG Consultants:
CONSULTING LEVEL DAILY RATE
---------------- ----------
Principal [**]
Senior Manager [**]
Project Manager [**]
DesignLead-visual-conceptual [**]
Technical Lead [**]
Senior Engineer [**]
Production Designer [**]
Engineer/Developer [**]
QA Engineer [**]
CUMULATIVE SUN CONSULTING SPEND DISCOUNT OFF ABOVE RATES
------------------------------- ------------------------
[**] [**]
[**] [**]
[**] [**]
[**] [**]
The calculation of total consulting dollars spend shall be based upon
the total cumulative spend for any ATG consulting services provided to Sun
worldwide, excluding fixed fee consulting engagements, during the [**] from the
Effective Date of this Agreement.
6.0 Documentation & Training Materials:
ATG grants to Sun the option to purchase all training material produced
by ATG for the Licensed Program(s) and grants Sun the right to modify and
customize such training material for the Licensed Program(s) for an annual fee
of [**] for each of the products listed in Section 2.0 of this Exhibit C.
Thereafter, ATG agrees, upon Sun's request, to supply Sun with all updates and
or revisions of such documentation for all
-26-
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
such product purchases as they become available and for as long as Sun remains
current in its Support Service payments. Sun is herein granted the right to
modify such training material for the purpose of conducting Sun's own internal
training classes.
7.0 Training Rates:
From the Effective Date of this Agreement through December 31, 1999 ATG
agrees to supply Sun with end-user training, at Sun designated sites, worldwide,
at a fee of [**] per day per class. Class sizes is limited to ten (10) students
(plus the reasonable cost of travel and related expenses for travel outside the
Boston, Massachusetts area and further provided that ATG obtains the written
approval of Sun for such cost, or estimated cost, prior to their incursion).
Training at ATG designated facilities shall be at the rate of four
hundred and ninety five dollars per student per day.
ATG further commits that all trainers supplied by ATG shall have
competent knowledge of Sun's Unix/Solaris operating systems.
ATG grants Sun the option to purchase ATG's Dynamo Mentor Package
("Jump Start") which includes [**] . Sun can purchase as many such packages as
Sun requires at any time during the [**] from the Effective Date of this
Agreement.
ATG grants Sun the option to purchase ATG's Dynamo Mentor Package
("Standard package") which includes [**] . Sun can purchase as many such
packages as Sun requires at any time during the [**] from the Effective Date of
this Agreement.
8.0 Mentor Packages:
ATG grants Sun the option to purchase ATG's Dynamo Mentor Package
("Jump Start") which includes [**] . Sun can purchase as many such packages as
Sun requires at any time during the [**] from the Effective Date of this
Agreement.
-27-
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
ATG grants Sun the option to purchase ATG's Dynamo Mentor Package
("Standard Package") which includes [**] . Sun can purchase as many such
packages as Sun requires at any time during the [**] from the Effective Date of
this Agreement.
ATG grants Sun the option to purchase ATG's Dynamo Mentor Package
("Extended Package") which includes [**] . Sun can purchase as many such
packages as Sun requires at any time during the [**] from the Effective Date of
this Agreement
-28-
EXHIBIT D TO THE SOFTWARE LICENSE AGREEMENT
NO. 99-2006
PROFESSIONAL SERVICES AGREEMENT
BETWEEN SUN MICROSYSTEMS INC. AND ART TECHNOLOGY
GROUP INC.
AGREEMENT NO. 99-0013
This Professional Service PSA ("PSA"), is made and entered into on and as of the
27th day of March, 1998 ("Effective Date"), by and between Art Technology Group
Inc. ("ATG"), a Massachusetts corporation, having its principal offices at ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and Sun Microsystems,
Inc., ("Sun") a Delaware corporation, which has its principal place of business
at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. In consideration of the
mutual promises contained herein, Sun and ATG agree as follows:
1. Scope - ATG and Sun agree that this PSA shall cover all consulting work
performed by ATG on behalf of Sun for any ATG software product implementation.
Hereinafter such work shall be referred to as "Services." All deliverables
resulting from ATG's performance of Services hereunder shall hereinafter be
referred to as "Work Product."
2. Services
A. ATG shall perform, in a workmanlike manner, the Services and/or
create and provide the deliverables, in accordance with Statement of Work(s)
which shall be set for each engagement and which shall reference this PSA No.
99-0013 and be signed-off by both Sun and ATG prior to the performance of such
Services. The first Statement of Work is attached hereto as Exhibit A. ATG
agrees to work with Sun to fix price, where ever possible, each of the
requirements and deliverables of each Statement of Work.
B. In the event Sun requests consulting services which would result in
modification to any ATG standard software product, ATG agrees to notify Sun as
part of the Statement of Work, whether such modification(s) will be supported
under ATG's standard support service policies. In the event such modifications
are not covered under ATG standard support, then ATG agrees to include in the
Statement of Work, the yearly support cost required to support such
modifications. In the event ATG fails to comply with this requirement, then ATG
agrees to support such modifications AT NO ADDITIONAL COST TO SUN. In the event
that ATG incorporates any Sun requested modification(s) into its commercially
released product then ATG agrees such modifications will be covered under its
standard support policies.
C. For work performed by ATG that results in "Sun specific
modifications" to
-1-
ATG software, herein defined as modifications that will not be incorporated in
ATG's commercially released product, then, for such modifications, ATG agrees to
include in the Statement of Work, a "not to exceed" costing model for
maintaining such modifications for future releases and versions of the
underlying software products.
3. Payment for Services
A. As full compensation and consideration for the Services and other
obligations of ATG set out in Exhibit A, Sun will pay ATG in accordance with the
payment schedule set forth in the Statement of Work(s). ATG shall invoice Sun
for all consulting services at the rates stipulated in the applicable Statement
of Work(s) which shall be set for each engagement and which shall reference this
PSA No 99-0013. Sun agrees to pay the reasonable out-of-pocket cost associated
with performance of the Statement of Work, provided however that ATG notifies
Sun of such cost in writing prior to the incursion of any such cost that exceeds
$500.
B. At the end of each month, ATG shall submit, in duplicate, an invoice
to Sun for the Services performed, and any allowed expenses incurred, in the
immediately preceding month. ATG shall include with each invoice the following:
1) A project log summarizing the overall progress of the project to date, along
with a statement of any problems that ATG requires Sun's assistance to resolve.
2) Such ATG material as is necessary to provide Sun with visibility of project
progress with respect to schedule and budget. 3.) Receipts or other
documentation supporting reimbursable expenses approved by Sun.
C. ATG agrees promptly to pay its employees for all work performed. If
ATG does not pay its employees on a current basis for work performed on behalf
of Sun, such nonpayment shall be a material breach of this PSA and shall entitle
Sun, in addition to all other remedies, to contract directly with such employee
on a consulting basis.
D. Payment terms are Net, 30 days from date of invoice, with the
exception of payment schedule set forth in Statement of Work(s).
4. Interim Review
A. At each milestone in the Statement of Work, Sun will review the
progress of the project, provide written direction for any revisions that may be
desired by Sun to the Statement of Work, any such revisions being subject to
Contractor's reasonable approval, and, if appropriate, authorize Contractor, in
writing, to proceed to the next stage of the project. If changes in the work are
required due to the errors or omissions of ATG, ATG shall, at its expense, make
any revisions requested by Sun which are necessary to make the Services conform
to the Statement of Work.
-2-
B. Sun reserves the right to reject the Services anytime, if the
Services were not delivered in a timely manner in material conformance with the
Statement of Work. If Sun determines that the Services do not conform to the
Statement of Work, Sun shall notify the ATG in writing, and ATG shall have
thirty (30) working days to submit new deliverables and perform new Services
conforming to the Statement of Work.
5. Changes - Sun may, from time to time, request in writing, changes in the
Statement of Work. Thereafter, ATG shall, as soon as practical, submit a
proposal of changes in cost and schedule. Such changes may be authorized by a
change order form ("Change Order") signed by the Sun Project Manager and ATG
shall promptly effect such changes.
If Sun elects to change the functionality as described in the Statement
of Work, the following procedures shall apply:
(i) Sun will provide ATG in written form, the general nature
of the changes required.
(ii) ATG will provide a written fixed and firm price (unless
Sun and ATG agree in writing to a different basis for pricing)
to investigate the effect of the change upon the existing
Statement of Work.
(iii) Sun will then have the option to authorize the
investigation.
(iv) Upon authorization, ATG shall investigate the change(s)
and provide Sun with a written fixed and firm price (unless
Sun and ATG agree in writing to a different basis for
pricing), and specification, to change the Statement of Work
to meet the Change Order specification(s).
(v) Sun will then have the option to authorize ATG to
implement the change.
(vi) Upon authorization, ATG commits to implement such
change(s) and to support such changes as part of ATG's
standard support service policy unless ATG has elected out of
such support in accordance with Section 2B herein.
(vii) ATG may propose changes to the Statement of Work,
however, such proposed changes must be in writing and Sun must
acknowledge, in writing, Sun's acceptance of such proposed
changes before they will become part of the Statement of Work.
-3-
6. Documentation - ATG agrees to supply Sun, at no additional cost to Sun, all
documentation necessary to Sun to understand and utilize all Work Product
produced under this PSA.
7. Term - This PSA shall commence with the Effective Date and shall end on
December 31, 2000.
8. Relationship of Parties - ATG shall perform the Services under the general
direction of Sun, but ATG shall determine, in ATG's sole discretion, the manner
and means by which the Services are accomplished. ATG shall at all times comply
with all applicable law in the performance of the Services. It is expressly
agreed that ATG is an independent contractor, and neither ATG nor ATG's
employees, agents, or consultants are employees or agents of Sun and have no
authority to bind Sun by contract or otherwise.
9. Personnel - ATG represents that ATG has or will secure all personnel required
to perform the Services under this PSA. Such personnel shall not be employees of
Sun. ATG's employees and agents shall, except as otherwise authorized by Sun,
observe the working hours, working rules and holiday schedule of Sun while
working on Sun's premises. Sun reserves the right to direct the replacement of
any personnel assigned by ATG to perform the Services in that if Sun reasonably
determines that the presence of such person is detrimental to the progress of
the work, ATG shall replace such personnel with properly qualified personnel as
soon as is reasonably practical. It is understood by both parties that such a
change in personnel may necessitate a change in the Statement of Work and that
any such changes shall be governed by the terms of this PSA.
10. Employment Taxes and Benefits - ATG shall be responsible for the payment of
any and all taxes due as a result of the performance of the Services hereunder
by any of its employees. ATG acknowledges and agrees that it is solely the
responsibility of ATG to report as income all compensation received hereunder
and ATG shall indemnify and hold harmless Sun from any obligation to pay
employment related charges or taxes, including any interest or penalties
thereon, in connection with any payments made to ATG hereunder.
11. Ownership of Work Product
A. If in the course of providing the Services, ATG creates for Sun any
software ("Developed Software") as specified on a Statement of Work signed by
both parties, the Services shall be considered a Work for Hire and Sun shall
have all rights of ownership in the Developed Software, except to the extent any
ATG software and any ATG enhancements to the ATG software is embedded in the
Developed Software. ATG software and any ATG enhancements to the ATG software
shall remain the exclusive property of ATG and Sun shall have no ownership
interest therein. Sun shall have a nonexclusive right to use the ATG Software to
the extent embedded in the Developed
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Software. ATG shall have no rights in the Developed Software except as otherwise
mutually agreed to in writing by the parties.
B. Any ideas, know-how, or techniques which may be developed by ATG as
a result of providing the Services, including any enhancements made to ATG's
supplied software source code (collectively "Developments"), shall be the
property of ATG. ATG grants to Sun a nonexclusive, perpetual, non-transferable
royalty free license to use the Developments as required for internal use. No
title shall pass to Sun with respect to any Developments or related
documentation.
12. Indemnity
A. NEITHER PARTY WILL BE LIABLE TO THE OTHER PARTY FOR INDIRECT,
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOST
DATA OR LOST PROFITS, HOWEVER, ARISING, EVEN IF SUCH PARTY HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES. EXCEPT AS PROVIDED IN SECTION 13A AND 13B
HEREOF, ATG'S LIABILITY FOR DIRECT DAMAGES UNDER THIS PSA, OR ANY STATEMENT OF
WORK ATTACHED HERETO OR REFERENCING THIS PSA, SHALL IN NO EVENT EXCEED THE
AMOUNT PAID BY SUN TO ATG WITH RESPECT TO THE SERVICES WHICH GAVE RISE TO THE
CLAIM. THE PARTIES AGREE TO THE ALLOCATION OF LIABILITY RISK WHICH IS SET FORTH
IN THIS SECTION 12A. THE FOREGOING LIMITATION SHALL NOT APPLY TO TANGIBLE
PROPERTY DAMAGE OR FOR DAMAGES DUE TO BODILY INJURY OR DEATH, TO THE EXTENT THAT
ALL SUCH DAMAGES HAVE BEEN DIRECTLY CAUSED BY ATG OR ANY OF ITS EMPLOYEES IN THE
PERFORMANCE OF SERVICES HEREUNDER.
B. ATG shall indemnity and hold harmless Sun, its officers, directors,
employees, agents and attorneys from and against any claims or actions brought
by third parties and from damages, losses, expenses, including reasonable
attorney's fees and costs of litigation directly resulting from the performance
of the Services by ATG, its agents, employees, or contractors.
13. Intellectual Property Warranty and Indemnification
A. ATG represents and warrants that, to the best of ATG's knowledge,
any Developed Software produced hereunder does not violate any patent, mask work
rights, copyright, trade secret, trademark, or other proprietary right of any
third party, and that ATG has the right to make disclosure and use of all such
information used by ATG in the performance of the Services.
B. If any claim of infringement is made by any third party against Sun,
exclusively due to Sun's use of any Work Product provided by ATG hereunder, Sun
shall promptly notify ATG and ATG shall defend, indemnify and hold Sun harmless
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against any and all liability, losses, claims, expenses (including reasonable
attorney's fees), demand or damages of any kind arising out of or related to any
such claim, whether or not that claim is successful, provided that:
(i) Sun promptly notifies ATG in writing of the claim;
and
(ii) ATG has control of the defense and all related
settlements negotiations, provided that, ATG agrees to submit
to Sun the terms of any settlement litigation ("Proposed
Settlement") covered by this Section 13 in which Sun is named
as a party. If within five (5) business days of Sun's receipt
of the Proposed Settlement, ATG does not receive in writing a
disapproval of the Proposed Settlement, the Proposed
Settlement shall be deemed approved by Sun. If within five (5)
business days of Sun's receipt of the Proposed Settlement, ATG
receives from Sun a disapproval of the Proposed Settlement,
ATG shall not enter into the settlement in Sun's name (but may
enter into the settlement as it applies to ATG or any other
third parties), and in such event ATG shall not be required to
indemnify Sun for any final judgment thereafter entered
against Sun in excess of the dollar amount of the Proposed
Settlement. Notwithstanding the above, if the Proposed
Settlement imposes any obligation other than (a) to cease
using the infringing Work Product, (b) to destroy or return
the infringing Work Product, and/or (c) to pay a third party
or parties monies, then if Sun rejects the Proposed Settlement
within the time period specified above, ATG shall still be
required to defend Sun in the dispute and to indemnify Sun for
any final judgment in such suit.
(iii) Sun fully cooperates with ATG, at ATG's cost, in the
defense or settlement of such actions.
C. If Sun is enjoined, or likely to be enjoined, from using any of the
Work Product because of a claim of infringement of proprietary rights of any
third party, ATG shall, at its own expense:
(i) obtain for Sun the right to continue using such Work
Product;
(ii) replace or modify the Work Product to make it
non-infringing, so long as the replacement or modification conforms to the
Statement of Work and does not adversely impact functionality or performance of
the Work Product running in Sun's production environment; or
(iii) terminate this PSA and refund all payments made by Sun
herein.
14. Acceptance and Warranty - Acceptance shall be accomplished by using the
applicable test procedures or programs established by ATG and Sun as described
in the
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applicable Statement of Work. In the absence of any such acceptance test
procedures or programs, the Services provided by ATG hereunder shall be
deemed accepted upon completion. For a period of ninety (90) days from
Acceptance, ATG warrants that any deliverables provided pursuant to the
applicable Statement of Work will perform substantially in accordance with
the specifications set out in the Statement of Work. ATG's obligation
hereunder will be promptly to:
(i) bring such deliverables into substantial compliance
with the specifications, at ATG's sole expense, or
(ii) grant Sun a full refund of the compensation paid by Sun
relating to any such non conforming deliverables.
If ATG receives written notice of such defects during the warranty period, ATG
shall repair, fix or make workable, that portion of its work products which are
determined by Sun to be defective.
The warranty period begins either on the date of delivery of each element of the
Services or, where the purchase price includes installation by ATG, on the final
date of installation, whichever period is later. If Sun schedules or delays
installation more than thirty (30) days after Acceptance, the warranty period
begins on the thirty-first (31st) day from the date of delivery.
Warranty repairs will be made at no cost to Sun. ATG will pay all cost of
consulting services related to such repairs and all cost of travel, lodging and
related out-of-pocket cost for visits to Sun sites which are necessary to effect
such repairs.
The foregoing warranty shall not apply to defects resulting from: (1) Improper
or inadequate training or maintenance by Sun; (2) Sun-supplied software or
interfaces (except in the case of software approved by ATG for use with the
Services provided, and in the case of interface code written by ATG for Sun
under this PSA); (3) unauthorized modification or misuse, (where such
modifications or misuse is determined to be the underlying material cause of
such defects); (4) Operation of the code delivered outside of the specifications
for the product as contained in Exhibit A of the PSA; or, (5) Improper site
maintenance (where such site preparation and maintenance is determined to be the
underlying material cause of such defects).
The warranty set forth above is exclusive and no other warranty, whether written
or oral, is expressed or implied. ATG specifically disclaims the implied
warranties of merchantability and fitness for a particular purpose.
15. Insurance - During the performance of Services, and until termination of
this PSA, ATG at its sole cost and expense, shall carry and maintain policies or
insurance of the kinds and in the amounts set out below.
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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
A. Workers Compensation Insurance as required under the laws of the
States in which the work is performed with Employers Liability Coverage with a
limit of not less than [**].
B. Commercial General liability insurance covering all operations of
the ATG including products/completed operations and contractual liability
against claims for personal bodily injury and property damage with a combined
single limit of [**].
C. Automobile Liability insurance covering bodily injury and property
damage liability arising out of the use by or on behalf of the ATG, its agents
and employees of any owned, non-owned or hired automobile with combined single
limits not less than [**].
ATG shall provide Sun with a Certificate of Insurance stating that the
foregoing insurance policies are in full force and effect. ATG shall ensure its
insurer(s) endeavors to provide Sun with thirty (30) days written notice of any
cancellation of such policies.
16. Preexisting Obligations - ATG represents and warrants that ATG, its
employees and agents, if any, are under no preexisting obligation or obligations
inconsistent with the provisions of this PSA. ATG warrants that it has the right
to disclose or use all idea, processes, designs, data, and other information
which ATG has gained from third parties, and which ATG discloses or uses in the
performance of this PSA.
17. Financial Interest - ATG shall promptly disclose in writing to Sun all
actual or potential financial relationships ATG may have with respect to, or
resulting from, any recommendations or advice given by ATG to Sun.
18. Confidentiality - Work Product and information disclosed by either Sun or
ATG which the disclosing party deems to be Proprietary information including,
but not limited to, documents, observations and discussion of technology,
strategy, operations, internal corporate information, customers, sources of
supply, personnel and methods and procedures (herein "Proprietary Information")
shall be treated by the recipient in accordance with Paragraph 17A below.
A. Both Sun and ATG agree: (i) not to copy (except in the case of
copying documentation necessary for ATG personnel to accomplish their Service
task under this PSA), sell, disclose, make public or authorize any disclosure or
publication of any Proprietary Information; (ii) to take all reasonable and
necessary steps to assure that all principals, officers, agents, employees,
representatives, or any other persons affiliated in any manner with the
recipient of such information are given Proprietary Information on
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a need-to-know basis only, and they in turn do not disclose, or make public, or
authorize any disclosure or publication of any Proprietary Information; (iii)
not to use the Proprietary Information for any purpose other than in the
performance of the Services; (iv) to return all such information to the
disclosing party no later than fifteen (15) days after the date of termination
or expiration of this PSA or completion of the applicable Statement of Work,
whichever period is shorter, unless otherwise specified in writing by the
disclosing party, and (v) to require each individual directly involved in the
performance or receipt of Services hereunder to have on file with its company an
agreement containing nondisclosure obligations as least as protective of
confidential information as those contained herein.
B. Sun and ATG agrees that all Work Product and communications and
materials received by the other party will be deemed Proprietary Information
from disclosing party, unless and until such time as: (i) Such information is
generally available to the public, through no fault of the receiving party and
without breach of this PSA; (ii) Such information is already in the possession
of the receiving party without restriction and prior to any disclosure by
disclosing party hereunder; (iii) Such information is or has been lawfully
disclosed to the receiving party by a third party without an obligation of
confidentiality upon receiving party; (iv) recipient of such Proprietary
Information can demonstrate that such information was developed independently by
recipient without reference to the information disclosed by disclosing party.
C. Sun and ATG admit that monetary damages for any breach or threatened
breach of this Article are inadequate and that any breach or threatened breach
may constitute an irreparable injury to the disclosing party. In addition to all
other rights provided by law to which Sun and ATG shall hereby be entitled,
either party shall have the right to seek an injunction issued against the other
party to prevent any further breach. In the event that Sun or ATG seeks an
injunction hereunder, Sun and ATG hereby waives any requirement for the posting
of a bond or any other security.
19. Non Solicitation - Sun and ATG agree that while this PSA remains in effect
between Sun and ATG and for a period of one (1) year after the termination of
the agreement, neither party will directly solicit for hire, or endeavor to
directly entice away any employee of the other party's company or any of its
affiliates.
20. Termination - This PSA shall terminate upon the occurrence of any of the
following:
A. The liquidation or dissolution of Sun or ATG.
B. Termination by Sun for ATG's material breach of this PSA, which
breach continues incurred for a period of fifteen (15) days following ATG's
receipt of written notice thereof from Sun;
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C. Termination for convenience by Sun upon thirty (30) days written
notice. At Sun's request, ATG shall continue to perform the Services during that
thirty (30) day period and Sun agrees to pay ATG the cost of any such work
performed at the request of Sun at the consulting rates set forth in the related
Statement of Work.
21. Effect of Termination
A. Upon early termination of this PSA for any reason, Sun shall pay ATG
for all work completed in accordance with the then applicable Statement of Work.
B. Upon termination, ATG shall deliver to Sun within fifteen (15) days
after the date of termination of this PSA: (i) Any property of Sun in the
possession or control of ATG in good condition reasonable wear and tear
excepted; and (ii) All Work Product, whether finished or unfinished, prepared or
produced by ATG for Sun under this PSA, including all related documentation
necessary for Sun to understand and utilize the Work Product.
C. In no event shall Sun be responsible for payment for Services
performed or expenses incurred after the effective date of termination.
D. The termination of this PSA for any reason shall not relieve ATG of
its obligations under Paragraphs 9, 10, 11, 12 and 17 hereof, nor shall any such
termination relieve ATG or Sun from any liability arising of any breach of this
PSA.
22. Assignment - Neither party may assign this PSA (by operation of law or
otherwise) without the prior written consent of the other party, and any
prohibited assignment or sublicense shall be null and void. The foregoing
notwithstanding, with party may assign, or otherwise transfer this PSA to the
surviving entity as a result of a merger, acquisition or reorganization of all
of substantially all a party's assets or stock, provided that such entity is not
a direct competitor of the other party and agrees in writing it will be bound by
the terms and conditions of this PSA.
23. Discrimination - ATG shall not discriminate in any manner against any
individual because of race, color, religion, national origin, age, sex or
handicap. ATG, in performing Services under this PSA, shall comply with all
applicable laws, rules and regulations concerning the prohibition of
discrimination in employment.
24. Permits - ATG shall acquire and maintain in good standing, and at its sole
expense, all permits, licenses and other entitlement required of it in the
performance of Services under this PSA.
25. Attorneys' Fees - In the event that any dispute arises between the parties
hereto with regard to any of the provisions of this PSA or the performance of
any of the terms and conditions hereof, the prevailing party in any such dispute
shall be entitled to
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recover costs and expenses associated with resolving such dispute, including
reasonable attorneys' fees.
26 Miscellaneous
A. Exclusive PSA - This PSA, together with its Exhibits, is the
exclusive agreement between the parties with respect to its subject matter, and
supersedes all prior agreements, negotiations, representations, and proposals,
written or oral, related to its subject matter. Its terms cannot be modified,
supplemented or rescinded except by an agreement in writing signed by both
parties. Neither party shall be bound by nor liable to the other party for any
representation, promise, or inducement made by any of such party's agents or
employees which is not embodied in this PSA. In the event of any discrepancy or
inconsistency between this PSA and any other form used by either party in
connection herewith, the terms of this PSA shall govern.
B. Severability - If any provision of this PSA is held invalid,
illegal, or unenforceable, the validity, legality or enforceability of the
remaining provisions shall in no way be affected or impaired thereby.
C. Waiver - No waiver of any breach of this PSA shall constitute a
waiver of any other breach, whether of the same or any other covenant, term or
condition. The subsequent performance of any other terms, covenants, conditions
of the PSA shall not constitute a waiver of any preceding breach regardless of
the other party's knowledge of the preceding breach at the time of subsequent
performance, nor shall any delay or omissions of either party's exercise of any
right arising from any such default affect or impair the parties' rights as to
the same or future default.
D. California Law - This PSA shall be governed by and construed in
accordance with the laws of the state of California.
E. All notices given pursuant to this PSA shall be in writing and
either delivered by certified mail, or overnight delivery service, return
receipt requested, to parties at the addresses specified hereto, or to such
other address as either party may direct by similar notice to the other. All
notices given pursuant to this PSA shall be deemed to have been given on the
date of mailing; if correctly addressed and postage prepaid.
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IN WITNESS WHEREOF, the parties to this PSA execute it through their duly
authorized representatives.
Sun Microsystems, Inc. Art Technology Group, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------- ----------------------------
▇▇▇▇▇ ▇▇▇▇▇ Director of Worldwide Sales
------------------------------- ----------------------------
(Print Name) (Print Name)
Title: Global Commodity Manager Title: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------- -------------------------
Date: 3/27/98 Date: 4/2/98
---------------------------- -------------------------
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