EXHIBIT 10.14
INTERNATIONAL DISTRIBUTOR AGREEMENT
THIS INTERNATIONAL DISTRIBUTOR AGREEMENT (the "Agreement") is entered
into as of August 22, 1996 ("Effective Date") by and between Top Tier Israel
(1992) Ltd., a corporation duly organized and existing under the laws of Israel,
with its principal office located at 0 Xxxxxxxxxxx Xxxxxx, Xx'xxxxx, Xxxxxx, and
TopTier Software, Inc. a corporation duly organized and existing under law of
Delaware, with its principal office located at 0000 Xxx Xxxxxxx Xxxxxx, Xxxxx
000, Xxx Xxxx, Xxxxxxxxxx 00000 ("Distributor").
IN CONSIDERATION OF THE MUTUAL PROMISES CONTAINED HEREIN, THE PARTIES
AGREE AS FOLLOWS:
1. DEFINITIONS
1.1 "SOFTWARE" shall mean the most current version of each of Top Tier
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Israel's software products listed in Exhibit A attached hereto in
an object code copy or copies, together with a copy or copies of
any user manual or other documentation.
1.2 "DISTRIBUTOR CUSTOMER" shall mean any third party which acquires a
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license to (i)Use the Software for its own processing needs ("End-User")
(ii)Resell the Software to End-Users ("Reseller") (iii) incorporate the
Software within its own hardware or software systems for distribution or
resale ("OEM/ISV").
1.3 "TERRITORY" shall mean the United States and North America on an
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exclusive basis and the Rest of World (ROW) on a non-exclusive
basis.
1.4 All references in this Agreement to the "sale" of or "selling"
Software or Software Copies shall mean the granting of a LICENSE to use
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such Software of Software Copies. All references in this Agreement to the
"purchase" of Software or Software Copies shall mean the obtaining of a
LICENSE to use such Software or Software Copy.
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2. APPOINTMENT AND AUTHORITY OF DISTRIBUTOR
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2.1 APPOINTMENT. Subject to the terms and conditions set forth herein, Top
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Tier Israel hereby appoints Distributor as the exclusive distributor of the
Software in the U.S. and North American Territory, and Distributor hereby
accepts such appointment. TopTier also appoints Distributor as a non-exclusive
distributor for the Rest of the World and Distributor hereby accepts such
appointment. Distributor shall have the rights (i) to obtain Software from Top
Tier Israel and to market and distribute such Software within the Territory for
delivery to Distributor Customers in the Territory (ii) to appoint resellers and
sub-distributors to market and distribute the Software within the Territory(
iii) to negotiate and contract agreements with OEM/ISV customers. Top Tier
Israel retains full rights to appoint other distributors in that part of the
Territory defined as Rest of the World. The Distributor acknowledges and agrees
that sales made by Distributor shall only be made to Distributor Customers who
agree to be bound contractually to Distributor under terms and conditions
consistent with, and reflecting, this Agreement.
2.2 TERRITORIAL RESPONSIBILITY. Distributor shall use its best efforts
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to promote vigorously the marketing and distribution of the
Software to realize the maximum sales potential for the Software
in the Territory. Distributor shall be solely responsible for
advertising, marketing, promoting and distributing the Software in
the Territory. In consideration for its appointment, Distributor
agrees not to market and distribute within the Territory any
software products from other vendors (including Distributor's)
which, in Top Tier Israel's opinion, compete with Top Tier Israel
software products without Top Tier Israel's prior written consent.
2.3 MINIMUM GUARANTEED PAYMENTS BY DISTRIBUTOR
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Distributor undertakes to provide TopTier Israel with minimum
annual guaranteed payments, as advance payments to be reconciled
against the proceeds of TopTier Israel's sales to Distributor,
according to the monthly schedule in Exhibit B., as amended from
time to time by mutual agreement of the parties. Proceeds of
TopTier Israel's sales to Distributor will be reconciled against
the advances, on a periodic basis mutually agreeable to the
parties, but no less often than once every quarter. Failure by
Distributor to provide the minimum guaranteed revenues on a
monthly basis constitutes a breach of this agreement, which will
enable TopTier Israel to terminate the agreement for cause.
2.4 PAYMENTS
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Distributor shall make monthly payments as specified in Exhibit B,
by wire transfer, to TopTier Israel's bank. The cost of wire
transfer will be borne by Distributor.
3. SOFTWARE DISTRIBUTION
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3.1 DISTRIBUTOR CUSTOMERS' LICENSE. Prior to providing any Distributor
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Customer with Software, Distributor shall insure that the license
of such Software contains appropriate terms and conditions set
forth in a Software License Agreement which has been mutually
agreed upon by the parties and which shall be executed by the
Distributor Customer.
3.2 DISTRIBUTOR COPIES. Distributor shall have the right to order a
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reasonable number of Software copies, marked not for resale, or
marked For Evaluation Only, to be used for demonstration purposes
by Distributor or for evaluation purposes by potential Distributor
Customers ("Distributor Copies") provided Distributor shall pay to
Top Tier Israel the then current charges for any such Distributor
Copies (including shipping charges) set forth in Top Tier Israel's
International Price List and provided that the right to use such
Distributor Copies will be governed by the terms of a license
agreement approved and accepted by Top Tier Israel. Distributor
shall maintain records of the Distributor Copies' recipients and
shall provide said records to TopTier Israel at quarterly
intervals.
3.3 TITLE TO SOFTWARE AND RELATED MATTERS. Title to the Software
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(including the user manual, diskette and software contained
therein and all translations thereof) shall remain with Top Tier
Israel. Distributor shall not (and shall require that its
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Customers do not) remove, alter, cover or obfuscate any copyright
notices or other proprietary rights notices placed or embedded by
Top Tier Israel on or in any Software. Distributor shall not
provide services to others for the purpose of any such
modification, alteration, reverse engineering, disassembly or
decompilation. Distributor shall not, and shall not authorize any
third party to, modify, alter, reverse engineer, disassemble or
decompile the Software without the prior approval of Top Tier
Israel.
3.4 RECORDS AND AUDIT RIGHTS. Distributor agrees to make, and to
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maintain until three (3) years after the last payment under this
Agreement is due and paid, complete books, records and accounts
with respect to Distributor's distribution of and payment for
Software hereunder. Such records shall include number of units
shipped by product and platform, customer information, date of
shipment, copies of purchase orders and invoices and support
contract information. Top Tier Israel shall have the right to
audit such books and records for purposes of verification of the
sales and inventory information with respect to the Software. Any
such audit shall be conducted by Top Tier Israel or its
representatives during normal business hours, and Distributor
shall cooperate fully with Top Tier Israel or its representatives
in any such audit. Any underpayment shall be payable immediately.
4. TERMS OF PURCHASE OF SOFTWARE COPIES BY DISTRIBUTOR
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4.1 PRICES. All prices are F.O.B. Top Tier Israel facility. ("F.O.B.
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Point"). The Price to Distributor for the Software shall be equal
to 80% of Distributor's license fee charged to its customers. The
difference between Distributor's fee to TopTier Israel and
Distributor's price to its customers shall be Distributor's sole
remuneration for distribution of the Software Copies. Top Tier
Israel has the right at any time to revise its prices charged to
Distributor.
4.2 TAXES. Amounts payable to Top Tier Israel under this Agreement are
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payable to Top Tier Israel generally without deduction for taxes,
(including any sales, use, excise, ad valorem, property, value
added tax, or other tax), tariff, duty or assessment levied or
imposed by any government authority (including without limitation
any country, state, city, county, province, department, or other
subdivision of the national government). Distributor shall pay all
such taxes and customs duties payable with respect to the sale and
purchase of Software Copies under this Agreement. When Top Tier
Israel has the legal obligation (independent of this Agreement) to
collect such taxes, the appropriate amount shall be added to
Distributor's invoice and paid by Distributor unless Distributor
provides Top Tier Israel with a valid tax exemption certificate
authorized by the appropriate taxing authority. Distributor shall
cooperate with Top Tier Israel and shall provide Top Tier Israel
with certificates or receipts issued by the appropriate taxing
authority. Distributor's tax records relating to any tax for which
Top Tier Israel has any legal liability in the Territory shall
also be considered "accounting records" under Section 3.4 and
subject to audit by Top Tier Israel. Amounts payable to Top Tier
Israel under this agreement are however net of
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income tax withheld at source, if any, that may be applicable to
the purchase of the Software Copies.
4.3 TERMS AND CONDITIONS. All orders for Software by Distributor for
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distribution to End-Users shall be initiated by Distributor's
issuance of written purchase orders sent to Top Tier Israel (via
mail, telecopier, or telefax). Any order sent by mail, telecopier
or telefax shall be deemed signed by the Distributor as if an
original signed document were delivered to Top Tier Israel
regardless whether any such document is confirmed in writing by
mail, hand delivery or other original signed document. Such orders
shall state unit quantities, until descriptions, requested
delivery dates, and shipping instructions. Top Tier Israel may
accept or reject any order in whole or part, in its discretion.
This Agreement shall govern all orders of Software by Distributor.
No terms on purchase orders, invoices or like documents by
Distributor shall serve to alter or add to the terms of this
Agreement. Shipment will be F.O.B. Top Tier Israel's distribution
facility and all freight, insurance and other shipping expenses,
as well as any special packing expenses, shall be borne by
Distributor.
4.4 PAYMENT. Top Tier Israel shall submit an invoice to Distributor
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either upon each shipment of Software ordered by Distributor or on
another regular basis mutually agreed to by Top Tier Israel and
the Distributor. The invoice shall cover Distributor's fees for
the Software in a given shipment plus any freight, taxes and other
applicable costs initially paid by Top Tier Israel but to be borne
by Distributor. TopTier Israel's invoices to Distributor will be
reconciled against Distributor's advance payments to TopTier
Israel on a periodic basis, but no less frequently than once every
calendar quarter, at a mutually convenient date. After the
reconciliation, any excess amounts owed to TopTier Israel by
Distributor will be paid within 30 days of the date of
reconciliation of accounts. Distributor shall pay TopTier Israel
in U.S. dollars by wire of available funds to an account
designated by Top Tier Israel or as otherwise instructed by Top
Tier Israel. Distributor shall pay all of Top Tier Israel's costs
and expenses (including reasonable attorneys' fees) to enforce and
preserve Top Tier Israel's payment rights under this Section 4.4.
4.5 SHIPPING. All Software delivered pursuant to the terms of this
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Agreement shall be suitably packed for shipment in Top Tier
Israel's standard shipping cartons, marked for shipment at
Distributor's address set forth above, and delivered to
Distributor or its carrier agent at the F.O.B. Point, at which
time risk of loss shall pass to Distributor. Unless otherwise
instructed in writing by Distributor, Top Tier Israel shall select
the carrier. Distributor agrees to undertake all import
formalities required to import the Software Copies into the
Territory, and to bear full expense of all custom duties, freight,
insurance, and other shipping expenses, as well as any special
packing expense.
4.6 ACCEPTANCE. Distributor shall inspect all Software promptly upon
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receipt thereof and may reject any item that contains any
significant reproducible defects which render such Software unfit
for distribution to Distributor Customers, subject to return
procedures agreed upon by the parties. To reject a Software copy
Distributor
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shall within ten (10) days of receipt of such Software copy notify
Top Tier Israel of its rejection and of the defect which has
rendered the copy unfit for distribution. TopTier Israel will
replace the defective Software copy at its earliest opportunity
and instruct Distributor as to the required disposition of
rejected Software copy or copies, including at TopTier Israel's
discretion, authorized destruction or return for inspection.
Distributor shall maintain detailed records of rejected software
copies, including ultimate disposition upon instructions by
TopTier Israel.
5. MAINTENANCE AND SUPPORT
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5.1 CUSTOMER SUPPORT. Distributor agrees that Distributor is
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responsible for supporting all Software it distributes, directly
or through resellers, to Distributor Customers. TopTier Israel
will provide maintenance and warranty support as detailed in
Sections 5.2 and 5.3 and assistance and customer support to the
extent requested by Distributor in exchange for 80% of all fees
charged by Distributor to its Distributor Customers for service,
warranty or maintenance agreements. TopTier Israel will receive no
other compensation from Distributor for these support services.
Distributor shall also maintain on-site staff support personnel
sufficiently knowledgeable with respect to the Software to answer
customer questions regarding the use and operation of Software
marketed by Distributor. TopTier Israel shall provide Distributor
with the support and technical assistance set forth in Sections
5.2, 5.3 and 7.1 below.
5.2 ADDITIONAL SUPPORT/MAINTENANCE. Top Tier Israel will provide to
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Distributor all error corrections and updates to the Software
which Top Tier Israel makes generally available to its Software
customers. Top Tier Israel will provide reasonable consultation
via telephone and facsimile to Distributor during Top Tier
Israel's normal business hours with respect to any End-User
questions that Distributor cannot adequately answer. Distributor
shall offer its customers maintenance contracts and shall provide
maintenance services, which shall include the opportunity to buy
upgrades (i.e., from version 2.0 to 3.0). Distributor shall
maintain and provide Top Tier Israel upon request, customer lists
and records identifying which customers have maintenance
contracts. Top Tier Israel shall deliver updates to the
Distributor and the Distributor agrees to deliver updates to
customers in a timely manner
5.3 TOP TIER ISRAEL UPGRADES. Top Tier Israel may, from time to time,
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upgrade the Software, provided that nothing herein shall obligate
Top Tier Israel to produce any such upgrade. Top Tier Israel
reserves the right to require an additional charge for such
upgrade. Distributor shall be responsible for offering training in
the use and operation of such upgrades to its End-Users. Any
upgrade shall be subject to the terms of this Agreement.
6. LIMITED WARRANTY
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6.1 STANDARD LIMITED WARRANTY. Top Tier Israel warrants Distributor
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that, for a period of one year after the date of delivery to
Distributor of a Software copy, the media on
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which the Software is furnished under normal use will be free from
defects in materials and workmanship. The above warranty does not
apply to any Software copy that has been modified or altered by
any party other than Top Tier Israel or for any defects caused by
any use of the Software copy in a manner for which it was not
designed, or by the negligence of any party other than Top Tier
Israel. Top Tier Israel does not warrant that use of the Software
will be uninterrupted or error free.
TOP TIER ISRAEL'S SOLE LIABILITY WITH RESPECT TO THE ABOVE EXPRESS
WARRANTY SHALL BE FOR TOP TIER ISRAEL AT ITS OPTION, TO CORRECT
THE SOFTWARE COPY, REPLACE THE SOFTWARE COPY, OR REFUND THE AMOUNT
PAID FOR SUCH SOFTWARE COPY. DISTRIBUTOR SHALL NOT MAKE OR PASS ON
TO ANY PARTY ANY WARRANTY OR REPRESENTATION ON BEHALF OF TOP TIER
ISRAEL OTHER THAN OR INCONSISTENT WITH THE ABOVE LIMITED WARRANTY.
6.2 NO OTHER WARRANTY. EXCEPT FOR THE EXPRESS LIMITED WARRANTY SET
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FORTH ABOVE, TOP TIER ISRAEL GRANTS NO OTHER WARRANTIES, EXPRESS
OR IMPLIED, BY STATUTE OR OTHERWISE, REGARDING THE SOFTWARE
COPIES, AND SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OF
NONINFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
7. ADDITIONAL OBLIGATIONS OF DISTRIBUTOR
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7.1 SALES REPORTS. Distributor shall provide Top Tier Israel with a
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quarterly sales report showing, at a minimum, units sold per
Software item, unit prices per item sold, total units sold and
total invoices to customers for sales of Software and maintenance
service contracts. This report will be forwarded to Top Tier
Israel as mutually agreed upon by the parties.
7.2 DEMONSTRATIONS AND STAFF TRAINING. Distributor shall provide (at
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Distributor expense) adequate training to its staff regarding the
use and operation of the Software and any updates thereto.
7.3 ANNUAL BUSINESS PLAN. Distributor has delivered to Top Tier Israel
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its initial business plan for the first year of this Agreement.
Sixty (60) days prior to the anniversary date of this Agreement,
Distributor shall provide to Top Tier Israel for approval a
reasonably detailed annual business plan Distributor agrees to use
best efforts to pursue its annual business plan. Substantial non-
performance of such annual business plan shall constitute a
default under this Agreement.
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7.4 MARKETING ACTIVITIES. Top Tier Israel and Distributor shall
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mutually agree on marketing plans, including positioning of
products, nature of marketing and advertising and promotional
campaigns and budgets for marketing expenditures, within six (6)
months of the Effective Date of this Agreement.
8. ADDITIONAL OBLIGATIONS OF TOP TIER ISRAEL
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8.1 MARKETING MATERIALS. Top Tier Israel shall provide Distributor
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with technical information concerning Software as required for the
creation of marketing materials and shall fully and promptly
cooperate with Distributor's request for review and editing of
such materials.
9. TERM AND TERMINATION
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9.1 TERM. This Agreement shall commence on the date of this Agreement
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and shall continue in force unless terminated under the provisions
of this Section 9.
9.2 TERMINATION FOR CAUSE.
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(a) If either party defaults in the performance of any
provisions of this Agreement, then the non-defaulting party
may give written notice to the defaulting party that if the
default is not cured within thirty (30) days the Agreement
will be terminated. If the non-defaulting party gives such
notice and the default is not cured during the thirty (30)
day period, then the Agreement shall terminate at the end of
that period. Notwithstanding the foregoing, in the event
that Distributor fails to make advance payments according to
the schedule in Exhibit B, pursuant to Sections 2.3, or to
promptly pay amounts due to TopTier Israel after quarterly
reconciliation of accounts, pursuant to Section 4.4, TopTier
Israel may terminate this Agreement for cause.
(b) This Agreement shall terminate, without notice, (i) upon the
institution by or against Distributor of insolvency,
receivership or bankruptcy proceedings or any other
proceedings for the settlement of Distributor's debts, (ii)
upon Distributor's making an assignment for the benefit of
creditors, (iii) or upon Distributor's dissolution.
(c) This Agreement shall terminate immediately upon written
notice to Distributor (i) in the event that any current
legislation or exchange controls under applicable law
preclude Distributor from making payments to Top Tier Israel
in United States currency for a period of sixty (60) days
provided, however, that termination under this subsection
shall not relieve Distributor of its payment obligations
under this Agreement or (ii) upon the enactment of any law,
decree or regulation by the government of the Territory
which would impair or restrict (A) the right of Top Tier
Israel to terminate this Agreement as herein provided, (B)
Top Tier Israel's right, title or interest in the
intellectual property rights in the Software, Software
Copies, documentation or other property
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covered by this Agreement or (C) Top Tier Israel's rights to
receive payment under this Agreement.
(d) This Agreement shall terminate immediately and without
notice ninety (90) days from the Effective Date if Top Tier
Israel has not received written evidence from Distributor by
such date that Distributor has secured all government
approvals, if any, in the Territory necessary to carry on
the transactions contemplated by this Agreement.
9.3 TERMINATION FOR CONVENIENCE. Either Top Tier Israel or Distributor
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may terminate this Agreement, at any time, with or without cause,
upon ninety (90) days prior written notice.
9.4 EFFECT OF TERMINATION.
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(a) Upon termination of this Agreement for any reason
whatsoever, Top Tier Israel shall have no further obligation
to Distributor other than those set forth in this Section 9.
Top Tier Israel shall not be liable to Distributor for, and
Distributor hereby expressly waives all rights to
compensation, indemnities or damages of any kind, whether on
account of the loss by Distributor of present or prospective
profits, commissions, anticipated orders, expenditures,
investments, or commitments made in connection with this
Agreement, goodwill created, or on account of any other
reason whatsoever. Upon termination of this Agreement for
any reason, Distributor shall deliver to Top Tier Israel,
within ten (10) days, the name and address of each customer
of Distributor or customer of a reseller, and the name and
address of each customer that has a maintenance contract
with Distributor or a reseller, plus all of the records
described in Section 3.4 above.
(b) The parties have expressed that, as an essential and
fundamental condition of their agreement to enter into and
be bound by the terms and conditions and contemplated
pricing of this Agreement, all elements of this Agreement
shall be governed exclusively by the laws of the State of
California (pursuant to Section 14.2 of this Agreement). If,
notwithstanding this fundamental agreement, under any
applicable law within the Territory distributors are
entitled to any compensation upon termination for cause or
the expiration of a fixed term of their distribution
agreement, this Agreement shall be deemed a contract for a
duration of not more than two years, and shall expire upon
the expiration of such two years after the initial effective
date of this Agreement. To the extent any such compensation
is deemed earned as a matter of law, the parties shall
retroactively readjust all prices so that the prices charged
to the Distributor shall be increased by the amount
necessary to give such compensation to the Distributor as
part of the overall pricing and compensation arrangements
between the parties.
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9.5 RETURN OF MATERIALS. All trademarks, trade names, patents,
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copyrights, designs, drawings, formulas or other data,
photographs, samples, literature, and sales aids of every kind
shall remain the property of Top Tier Israel. Within thirty (30)
days after the termination of this Agreement, Distributor shall
prepare all such items in its possession for shipment, as Top Tier
Israel may direct, at Top Tier Israel's expense. Distributor shall
not make or retain any copies of any confidential items or
information which may have been entrusted to it. Effective upon
the termination of this Agreement, Distributor shall cease to use
all trademarks, marks, and trade names of Top Tier Israel.
9.6 TRANSITION OF SUPPORT CONTRACTS. Distributor agrees to use its
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best efforts to register all Top Tier Israel customers, and that
this registered customer base will be sent to Top Tier Israel at
the end of each calendar quarter. If this distribution agreement
is terminated for whatever reason, then Distributor will hand over
to Top Tier Israel or a designated representative, the then
up-to-date registered customer base. Upon payment to Top Tier
Israel or a designed representative of a mutually agreed upon
pro-rated amount of year-to-date support revenue, Distributor will
no longer have the responsibility for supporting those customers.
9.7 SURVIVAL OF CERTAIN TERMS. The provisions of Sections 3.4, 4.4,
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4.6, 6, 9.4, 10, 11, 12, 13, and 14 shall survive the termination
of this Agreement for any reason. All other rights and obligations
of the parties shall cease upon termination of the Agreement.
10. LIMITED LIABILITY
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TOP TIER ISRAEL'S TOTAL LIABILITY UNDER ANY CAUSE OF ACTION
ARISING UNDER THIS AGREEMENT SHALL NOT EXCEED THE AMOUNTS RECEIVED
BY TOP TIER ISRAEL FROM DISTRIBUTOR UNDER THIS AGREEMENT. IN NO
EVENT SHALL EITHER PARTY HAVE ANY LIABILITY TO THE OTHER OR TO ANY
OTHER THIRD PARTY, FOR ANY LOST PROFITS OR COSTS OF PROCUREMENT OF
SUBSTITUTE GOODS OR SERVICES, OR FOR ANY OTHER INDIRECT, SPECIAL
OR CONSEQUENTIAL DAMAGES RESULTING FROM THE USE OF THE LICENSED
PRODUCTS, OR THE FAILURE OF THE LICENSED PRODUCTS TO PERFORM, OR
FOR ANY OTHER REASON OR ARISING UNDER ANY CAUSE OF ACTION;
PROVIDED, HOWEVER, THAT THIS LIMITATION SHALL NOT APPLY TO ANY
BREACH OF THE CONFIDENTIALITY OBLIGATIONS SET FORTH IN SECTION 11
OR TO DISTRIBUTOR'S EXCEEDING ITS AUTHORITY GRANTED HEREIN. IT IS
ACKNOWLEDGED BY THE PARTIES THAT NOTHING IN THIS SECTION 10 SHALL
LIMIT DISTRIBUTORS OBLIGATION TO PAY AMOUNTS ALREADY DUE AND OWING
TO TOP TIER ISRAEL.
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11. PROPERTY RIGHTS AND CONFIDENTIALITY
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11.1 PROPERTY RIGHTS. Distributor agrees that Top Tier Israel owns all
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right, title, and interest in the Software, in each Software copy
and documentation, and in all of Top Tier Israel's patents,
trademarks, trade names, inventions, copyrights, know-how, and
trade secrets relating to the design, manufacture, operation or
service of the Software. The use by Distributor of any of these
intellectual property rights is authorized only for the purposes
herein set forth, and upon termination of this Agreement for any
reason such authorization shall cease. Distributor agrees to
assign (or cause to be assigned) and hereby does assign fully to
Top Tier Israel all worldwide right, title and interest to the
aforementioned intellectual property rights, as well as all
derivatives and modifications thereof and thereto, conceived, made
or discovered by Distributor, solely or in collaboration with
others, and to execute all documentation reasonably necessary to
effect assignment of, any and all such intellectual property
rights to Top Tier Israel.
11.2 CONFIDENTIALLY. Each party hereto acknowledges that by reason of
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its relationship to the other hereunder it will have access to
certain information and materials concerning the other party's
business, plans, customers, technology, and products that are
confidential and of substantial value to such party, which value
would be impaired if such information were disclosed to third
parties. Each party agrees that it will not use in any way for its
own account or the account of any third party, nor disclose to any
third party, any information received by it which is marked
confidential or which is disclosed orally and confirmed in writing
of its confidential nature within thirty (30) days after
disclosure by the other party (the "Confidential Information").
Each party shall protect the confidential nature of such
Confidential Information with at least the level of care it takes
to protect its own confidential information of similar value, but
in no event with less than reasonable care. Distributor shall not
publish any technical description of the Software other than the
description published by Top Tier Israel In the event of
termination of this Agreement, there shall be no use or disclosure
by either party of any Confidential Information of the other.
11.3 NOTIFICATION OF UNAUTHORIZED USE. Distributor shall promptly
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notify Top Tier Israel in writing upon its discovery of any
unauthorized use or infringement of the Software of Top Tier
Israel's patent, copyright, trademark or other intellectual
property rights with respect thereto. Top Tier Israel shall have
the sole and exclusive right to bring infringement action or
proceeding against a third party, and, in the event that Top Tier
Israel brings such an action or proceeding, Distributor shall
cooperate and provide full information and assistance to Top Tier
Israel and its counsel in connection with any such action or
proceeding.
12. TRADEMARKS AND TRADE NAMES
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During the term of this Agreement, Distributor shall have the right to
indicate to the public that it is an authorized distributor of Top Tier
Israel Software and to advertise (within the Territory) such Software
under the trademarks, marks, and trade names that Top Tier Israel may
adopt from time to time ("Trademarks"), provided that all representations
of the Trademarks that Distributor intends to use shall first be
submitted to Top Tier Israel for approval (which shall not be
unreasonably withheld). Distributor shall not alter or remove any
Trademarks applied by Top Tier Israel to any Software or related
materials. Nothing herein shall grant to Distributor any right, title or
interest in the Trademarks. At no time during or after the term of this
Agreement shall Distributor challenge or assist others to challenge the
Trademarks or the registration thereof or attempt to register any
trademarks, marks or trade names confusingly similar to the Trademarks.
13. COMPLIANCE WITH LAWS
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13.1 FOREIGN CORRUPT PRACTICES ACT. In conformity with the United
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States Foreign Corrupt Practices Act and with Top Tier Israel's
established corporate policies regarding foreign business
practices, Distributor and its employees and agents shall not
directly or indirectly make an offer, payment, promise to pay, or
authorize payment, or offer a gift, promise to give, or authorize
the giving of anything of value for the purpose of influencing an
act or decision of an official of any government within the
Territory or the United States Government (including a decision
not to act) or inducing such a person to use his influence to
affect any such governmental act or decision in order to assist
Top Tier Israel in obtaining, retaining or directing any such
business.
13.2 EXPORT ADMINISTRATION ACT. In conformity with the United States
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Export Administration Act and regulations promulgated thereunder,
Distributor and its employees and agents shall not disclose,
export or re-export, directly or indirectly, any Software Copies
or technical data (or direct products thereof) provided under this
Agreement to destinations in Country Groups Q, S, W, Y and Z as
modified from time to time by the U.S. Department of Commerce, or
that are otherwise controlled under said Act and regulations.
13.3 CURRENCY CONTROL. Distributor represents and warrants that no
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currency control laws applicable in the Territory will prevent the
payment to Top Tier Israel of any sums due under this Agreement.
13.4 COMPLIANCE WITH APPLICABLE LAWS. Distributor shall comply, and
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shall require all of its reseller to comply, with all laws and
regulations applicable to Distributor with respect to (i) the
Software Copies, and (ii) the conduct of business generally. More
particularly, Distributor shall, without limitation:
(i) at its own expense, make, obtain, and maintain in force at all
times during the term of this Agreement, all filings,
registrations, reports, licenses, permits and authorizations
(collectively "Authorizations") in the Territory in order for
Distributor to perform its obligations under this Agreement. Top
Tier Israel shall provide
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Distributor with such assistance as Distributor may reasonably
request in making or obtaining any such Authorizations. In the
event that the issuance of any Authorization is conditioned upon
an amendment of modification to this Agreement which is
unacceptable to Top Tier Israel, Top Tier Israel shall have the
right to terminate this Agreement without further obligation
whatsoever to Distributor.
(ii)Advise Top Tier Israel of any legislation, rule, regulation or
other law (including but not limited to any customs, tax, trade,
intellectual property or tariff law) which is in effect or which
may come into effect in the Territory, whether before or after the
Effective Date and which affects the importation of the Software
Copies or documentation into, or the use and the protection of the
Software Copies or documentation within the Territory, or which
has a material effect on any provision in this Agreement.
13.5 ENFORCEABILITY. Distributor represents and warrants that the
---------------
provisions of this Agreement, and the rights and obligations of
the parties hereunder, are enforceable under the laws of the
country within the Territory.
13.6 NON-COMPLIANCE AS MATERIAL DEFAULT. Non-compliance by Distributor
-----------------------------------
or its employees or agents with this Section 13 shall be deemed to
constitute a material default under this Agreement, justifying
termination for default pursuant to Section 9.2 hereof.
14. GENERAL PROVISION
-----------------
14.1 INDEPENDENT CONTRACTORS. The relationship of Distributor to Top
------------------------
Tier Israel established by this Agreement is that of contractors,
and nothing contained in this Agreement shall be construed to (i)
give either party the power to direct and control the day-to-day
activities of the other, (ii) constitute the parties as agents,
partners, joint venturers, co-owners or otherwise as participants
in a joint or common undertaking, and (iii) allow Distributor to
create or assume any obligation on behalf of Top Tier Israel for
any purpose whatsoever. All financial obligations associated with
Distributor's business are the sole responsibility of Distributor.
All sales and other agreements between Distributor and its
customers are Distributor's exclusive responsibility and shall
have no effect on Distributor's obligations under this Agreement.
Distributor shall be solely responsible for, and shall indemnify
and hold Top Tier Israel free and harmless from, and all claims,
damages or lawsuits (including attorneys' fees) arising out of the
acts of Distributor or its resellers, employees or agents.
Distributor shall require each reseller in the chain of
distribution through it to comply with provisions reflecting the
Distributor's obligations to Top Tier Israel, so that upon Top
Tier Israel request Distributor shall be able to account to Top
Tier Israel in respect to compliance by Distributor with the
obligations hereunder for all Software Copies delivered to
Distributor. Distributor shall hold harmless and indemnify Top
Tier Israel (including its shareholders, directors, officers,
agents and employees, successors and assigns) from any claims or
liability arising out of or connected to any breach by Distributor
of its obligations under this Agreement,
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including, without limitation, any penalties, interest, attorneys'
fees and disbursements incurred by Top Tier Israel or any person
relying upon Distributor's obligations under this Agreement.
14.2 GOVERNING LAW. The rights and obligations of the parties under
--------------
this Agreement shall not be governed by the 1980 U.N. Convention
on Contracts for the International Sale of Goods; rather such
rights and obligations shall be governed by and construed under
the laws of the State of California, including its enactment of
the Uniform Commercial Code, without reference to conflict of laws
principles.
14.3 ARBITRATION. Any dispute or claim arising out of or in connection
------------
with this Agreement shall be finally settled by binding
arbitration in San Francisco, California under the Rules of
Arbitration of the American Arbitration Association by one
arbitrator appointed in accordance with said rules. Judgment on
the award rendered by the arbitrator may be entered in any court
having jurisdiction hereof. Notwithstanding the foregoing, the
parties may apply to any court of competent jurisdiction for
injunctive relief without breach of this arbitration provision.
14.4 ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
-----------------
and understanding of the parties relating to the subject matter
herein and merges all prior discussions between them. No
modification of or amendment to this Agreement, nor any waiver of
any rights under this Agreement, shall be effective unless in
writing signed by the party to be charged.
14.5 NOTICES. Any written notice required or permitted by this
--------
Agreement shall be in writing and shall be sent by mail to the
address shown at the beginning of this Agreement or at such other
address for which such party gives notice hereunder.
14.6 DOLLARS. All references to "dollars", "U.S. $" or "$" shall mean
--------
United States Dollars.
14.7 IT IS UNDERSTOOD AND AGREED THAT EACH AND EVERY PROVISION OF THIS
AGREEMENT WHICH PROVIDES FOR A LIMITATION OF LIABILITY, DISCLAIMER
OF WARRANTIES OR EXCLUSION OF DAMAGES IS INTENDED BY THE PARTIES
TO BE SEVERABLE AND INDEPENDENT OF ANY OTHER SUCH PROVISION AND TO
BE ENFORCED AS SUCH. FURTHER, IT IS EXPRESSLY UNDERSTOOD AND
AGREED THAT IN THE EVENT ANY REMEDY HEREUNDER IS DETERMINED TO
HAVE FAILED OF ITS ESSENTIAL PURPOSE, ALL LIMITATIONS OF LIABILITY
AND EXCLUSIONS OF DAMAGES SET FORTH HEREIN SHALL REMAIN IN EFFECT.
14.8 FORCE MAJEURE. Nonperformance of either party (except for payment
--------------
obligations) shall be excused to the extent that performance is
rendered impossible by strike, fire, flood, act of God, government
acts or orders or restrictions, failure of suppliers, or any other
reason where failure to perform is beyond the control and not
caused by the negligence of the nonperforming party.
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14.9 NO WAIVER. The failure of either party to enforce at any time any
----------
of the provisions of the Agreement, or the failure to require at
any time performance by the other party of any of the provisions
of this Agreement, will in no way be construed to present a future
waiver of such provisions, nor in any way affect the validity of
either party to enforce each and every such provision thereafter.
14.10 NONASSIGNABILITY AND BINDING EFFECT. A mutually agreed
------------------------------------
consideration for Top Tier Israel entering into this Agreement is
the reputation, business standing, and goodwill already honored
and enjoyed by Distributor under its present ownership, and,
accordingly, Distributor agrees that its rights and obligations
under this Agreement may not be transferred or assigned directly
or indirectly without the prior written consent of Top Tier Israel
Subject to the foregoing sentence, this Agreement shall be binding
upon and inure to the benefit of the parties hereto, their
successors and assigns.
14.11 LEGAL EXPENSES. The prevailing party in any legal action,
---------------
arbitration or other dispute resolution procedure brought by one
party against the other and arising out of this Agreement shall be
entitled, in addition to any other rights and remedies it may
have, to reimbursement for its expenses, including court costs,
arbitrator's fees and reasonable attorneys' fees.
14.12 SEVERABILITY. In the event that any provision of this Agreement
-------------
becomes or it declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in
full force and effect without said provision. The parties agree to
negotiate in good faith a substitute, valid and enforceable
provision that most nearly effects the parties' intent and to be
bound by the mutually agreed substitute provision.
14.13 LANGUAGE. This Agreement is in the English Language only, which
---------
language shall be controlling in all respects, and all versions
hereof in any other language shall be for accommodation only and
shall not be binding upon the parties hereto. All correspondence,
notices, orders, claims, suits and other communication between the
parties hereto shall be written or conducted in English.
14.14 HEADINGS. The headings and captions used in this Agreement are for
---------
convenience of reference only, and shall not in any way affect the
interpretation of the provisions of this Agreement.
14.15 COUNTERPARTS. This Agreement may be executed in tow or more
-------------
counterparts, each of which shall be deemed an original and all of
which together shall constitute one instrument.
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Xxxxxx Xxxxxx, Top Tier Israel, Ltd. Xxxx Xxxxxx, Top Tier Software, Inc.
------------------------------------ --------------------------------------
By: /s/ X. Xxxxxx By: /s/ Xxxx Xxxxxx
-------------------------------- -------------------------------
Title: Co-Chairman Title: Chairman and CEO
----------------------------- ----------------------------
Date: August 22, 1996 Date: August 22, 1996
------------------------------ -----------------------------
EXHIBIT A
In reference to Top Tier Israel's software products, products will be defined as
follows:
Item A
Item B
Item C
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