SOFTWARE LICENSE AND DISTRIBUTION AGREEMENT
THIS SOFTWARE LICENSE AND DISTRIBUTION AGREEMENT is made as of this 1st day
of January, 1994 (the "Effective Date"), by and between CCS TECHNOLOGY GROUP,
Inc. ("CCS"), a Florida corporation, and CCN MANAGEMENT SYSTEMS, INC. ("CCNMS"),
a Florida corporation.
BACKGROUND
CCNMS desires to grant license rights to CCS and to appoint CCS as a
distributor of certain software products identified in paragraph 1.1 below,
throughout the Territory, as described below, and CCS desires to accept such
license and appointment.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and covenants of the
parties herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Definitions.
1.1. When used herein the term "TRAMS Software" shall mean the following
specific software products in executable object code and in source
code in a form of magnetic media designated by CCS, including
without limitation, all future versions of, and revisions, upgrades,
corrections, bug fixes, enhancements and modifications to such
software that are prepared by CCNMS and delivered to CCS, and that
CCS accepts to become part of the TRAMS Software:
(a) That certain software known as "TRAMS," used for basic editing,
warehousing, reject correction, suspense, settlement,
reformatting, and routing capabilities.
(b) That certain software known as "TRAMS/BC," used to perform
reporting and settlement functions for files received from or
sent to VISA and MasterCard bank card associations.
(c) That certain Software known as "TRAMS/DE"' used to enter, edit,
and balance transactions through non-programmable IBM 3270
terminals (or compatible equipment).
(d) That personal computer based system for the IBM OS/2 operating
system, known as "TRAMS/AG" used to allow the entry of record
formats, code segments. and other information necessary to
generate programs and tables which form a part of the modules
used with this system.
1.2. When used herein the term "CCS" shall mean CCS Technology Group,
Inc., a Florida corporation. Such term shall also include any entity
of which CCS owns at least fifty percent (50%) of the voting stock
or in which CCS has at least a fifty percent (50%) voting interest,
upon such entire agreement in writing to be bound by the provisions
of this Agreement to the same extent as CCS.
1.3. When used herein the term "Documentation" shall mean all written
instructional materials and other documents in both a printed form
and stored in a magnetic media delivered to CCS by CCNMS explaining
the operation of the TRAMS Software which shall be delivered by
CCNMS in a form suitable for good quality reproduction.
1.4. When used herein the term "Service Bureau" shall mean a company that
processes transactions for third parties.
2. Appointment of CCS.
2.1. CCNMS hereby appoints CCS, and CCS hereby accepts such appointment,
as a non-exclusive distributor of the TRAMS Software everywhere in
the world ("Territory").
3. Term of Appointment.
This Agreement shall commence on the Effective Date and shall continue
perpetually, unless terminated strictly in accordance with the provisions of
paragraph 12 below.
4. License of TRAMS Software.
4.1. Subject to the provisions of this Agreement, CCNMS hereby grants to
CCS a non-exclusive, transferable license (the "License"):
(a) To use and reproduce the TRAMS Software for internal purposes,
or in a Service Bureau environment for its customers throughout
the Territory. The foregoing shall include reproduction and
operations of the TRAMS Software on the equipment of others,
pursuant to contracts with CCS, provided that the TRAMS Software
is used for CCS's internal purposes or in a Service Bureau
environment.
(b) To sublicense and distribute the TRAMS Software, in part or in
whole, in a standalone environment, or integrated into or
otherwise made a part of other products to end user/licensees
located anywhere in the world;
(c) To use the TRAMS Software for demonstration purposes to any
party whatsoever:
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(d) To create derivative works and to modify, rewrite, improve or
borrow from the TRAMS Software in any way;
(e) To reproduce the TRAMS Software, Documentation and marketing
materials of CCNMS for demonstration purposes and to distribute
the TRAMS Software and Documentation to licensee/ end users
through CCS' employees, or through CCS' contractors,
distributors, sales agents or dealers (collectively, "Dealers");
provided, however, except as currently used to protect
proprietary rights of CCNMS, or its affiliates, that the name of
CCNMS or any of its affiliates shall not be included or
reproduced on any of such materials unless specifically
authorized or required by CCNMS, or its affiliates, in writing.
Except for the marks identified in Schedule A, in no event shall
CCS use the name of CCNMS or any of its affiliates, or any of
their respective marks. names or logos, in connection with the
license, distribution or marketing of the TRAMS Software or any
other product, unless specifically approved in advance by CCNMS
or such affiliate in writing.
(f) To use the TRAMS Software for support and sales services; and
(g) To distribute the TRAMS Software and Documentation through CCS's
Dealers.
4.2. The License shall terminate only as provided in paragraph 12.1
below.
4.3. Within twenty (20) days after execution of this Agreement, CCNMS
shall provide to CCS one (1) copy of the computer codes (source
codes and object codes) for the TRAMS Software and all of the
Documentation and other operational material for the TRAMS Software
that is in the possession of CCNMS, through May 31, 1994, which
codes shall be maintained in accordance with the confidentiality
provisions of this Agreement.
4.4 In conjunction with the licenses granted in paragraph 4.1 above:
(a) CCNMS shall provide to CCS computer codes (source code and
object code) for all revisions, bug-fixes, updates,
improvements, modifications, and enhancements (the
"Updates") that may be made to the TRAMS Software or
Documentation by or on behalf of CCNMS during the term of this
Agreement, promptly after the creation of such Update and
release thereof to other customers. CCNMS, however, shall be
under no obligation to maintain, correct or fix the TRAMS
Software, or to maintain its compatibility with any other
programs or any equipment.
(b) Notwithstanding anything to the contrary in Sections 4(a)
above, CCNMS shall not be required, under any circumstances,
to perform in accordance
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with such provisions with respect to CCNMS customized client
specific enhancements
5. Trademark License.
5.1. CCS is hereby granted a non-exclusive license to use the trade
names, trademarks, and logos of CCNMS that relate to the TRAMS
Software and identified in Schedule A, but only in connection with
the advertisement, promotion, and license of TRAMS Software and
Documentation (the "Trademark License"). CCNMS hereby agrees to
reasonably attempt to register the "TRAMS" ▇▇▇▇ promptly in all
jurisdictions in which it is used.
5.2. The Trademark License shall terminate only upon, and simultaneously
with, the termination of all of the licenses granted herein.
6. Manner of Distribution; Other Matters.
6.1. In the event an end user/licensee licenses the TRAMS Software from
CCS or from any of its Dealers, CCS shall make a copy of the TRAMS
Software for delivery to such end user/licensee. CCS shall only make
those copies of the TRAMS Software, which in its sole discretion
reasonably exercised, are necessary for deliveries to the end
user/licensee for those purposes described in paragraph 4.1 above,
or for archival or backup purposes.
6.2 Subject to paragraph 6.4, CCS shall have exclusive authority and
control over the establishment of all (a) license fees and
maintenance fees charged to end user/licensees of the TRAMS
Software, who license the TRAMS Software from CCS and (b) terms and
conditions of all license agreements and maintenance agreements
between CCS and the end user/licensee of the TRAMS Software.
6.3 Subject to paragraph 6.4, CCS shall have exclusive control over the
methods employed by CCS to market, promote, and distribute the TRAMS
Software.
6.4. Any distribution or license of the TRAMS Software, Documentation, or
any part thereof, to a Dealer or to any end user/licensee, shall be
pursuant to written agreements ("Distribution or License
Agreements") which provide, among other things, that the Dealer or
end user/licensee (as applicable) will maintain the confidentially
of the distributed software and documentation, and that the Dealer
or end user/licensee will reproduce any and all confidentiality,
copyright and other notices on the distributed software or
documentation to the extent that copies thereof are permitted. All
Distribution and License Agreements shall contain confidentiality
and other provisions regarding the protection of software and
documentation distributed thereunder which are no less favorable
than distribution and license agreements for other products of CCS.
CCS further agrees that any distribution or license of the TRAMS
Software, Documentation, or any part
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thereof, will be for license or distribution fees that have not been
reduced by a corresponding increase in other fees (including,
without limitation, installation, training, maintenance, support,
development, or other services) the effect of which is merely to
lower the amounts due to CCNMS under this Agreement.
6.5. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, TranSys Corporation and
CCNMS, and their affiliates, hereby agree to cooperate and use their
best efforts to obtain the consent, approval and assignment of all
contracts identified on Schedule C ("Third Party Contracts") to CCS
from all persons or entities executing such Third Party Contracts
and as are reasonably requested by CCS. It is understood that CCNMS
may engage in the principal efforts to seek all such consents,
but TranSys Corporation agrees to cooperate fully and assist all
parties in obtaining such approvals, consents and assignments with
respect to the Third Party Contracts to the reasonable satisfaction
of CCS and its counsel.
6.6. Upon receipt by CCS of a third party consent (the "Consent Date") to
the assignment and assumption of a Third Party Contract set out on
Schedule C to CCS in executed in form reasonably satisfactory to CCS
and its counsel ("Third Party Consent"), CCS agrees to assume and
perform all obligations of CCNMS under such Third Party Contract
through the termination of such Third Party Contract. CCS hereby
indemnifies and holds harmless CCNMS, CCN Group, Ltd. and their
affiliates, and their respective officers, directors, employees and
agents, against and in respect of any and all loss, damage,
liability, cost and expense, including reasonable attorneys' fees,
suffered or incurred by all or any of them on and after each
applicable Consent Date resulting from any claims, liabilities,
obligations, damages and expenses with respect to the Third Party
Contract to which the Third Party Consent relates, including without
limitation, that specific Guaranty under the General Electric
Company Contract which CCN Group, Ltd. executed as guarantor in
favor of a licensee and those specific CCN Group, Ltd. guarantees
set out on Schedule D, copies of which are attached thereto.
CCNMS represents and warrants to CCS that it has not breached or
caused a default under any of the Third Party Contracts to which it
is a party. CCNMS hereby indemnifies and holds harmless CCS, TranSys
Corporation and their respective affiliates and their respective
officers, directors, employees, and agents, against and in respect
of any and all loss, damage, liability, cost and expense, including
reasonable attorneys' fees, suffered or incurred by all or any of
them, and
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arising out of any claims, liabilities, obligations, damages and
expenses with respect to a breach by CCNMS or its affiliates of a
Third Party Contract prior to the applicable Consent Date, provided
however, with respect to CCS, only to the extent such breach does
not arise out of any action or non-action by CCS pursuant to Section
6.7 below. TranSys Corporation, ▇▇▇ ▇▇▇▇▇▇▇, and ▇. ▇. ▇▇▇▇▇▇▇
hereby jointly and severally indemnify and hold harmless CCNMS and
its respective affiliates and their respective officers, directors,
employees and agents, against and in respect of any and all loss,
damage, liability, cost and expense, including reasonable attorneys'
fees suffered or incurred by all or any of them, and arising out of
any claims, liabilities, obligations, damages and expenses with
respect to the breach by all or any of them under any Third Party
Contract prior to the Consent Date, including, without limitation,
Third Party Contracts entered into by CCNMS and serviced and
maintained by TranSys Corporation. TranSys Corporation, ▇▇▇ ▇▇▇▇▇▇▇,
and ▇.▇. ▇▇▇▇▇▇▇ hereby jointly and severally indemnify and hold
harmless CCS and its respective affiliates and their respective
officers, directors, employees and agents, against and in respect
of any and all loss, damage, liability, cost and expense, including
reasonable attorneys' fees suffered or incurred by all or any of
them, and arising out of any claims, liabilities, obligations,
damages and expenses with respect to the breach by all or any of
them under any Third Party Contract prior to the Consent Date,
including, without limitation, Third Party Contracts entered into
by CCNMS and serviced and maintained by TranSys Corporation.
6.7. Notwithstanding anything contained in this Section 6.6 to the
contrary, CCS hereby agrees, as solely between CCS and CCNMS,
beginning July 1, 1994, to perform the maintenance responsibilities
on behalf of CCNMS with respect to the Third Party Contracts through
and including termination of such Third Party Contracts.
6.8. All maintenance fees due from First Star Information Services
Corporation through April 28, 1995, and all fees with respect to
Toronto Dominion Bank through July 15, 1995 (April 28, 1995 and
July 15, 1995, respectively, "Paid Through Dates"), shall remain
due and payable to CCNMS and any part thereof received by CCS,
TranSys Corporation, ▇▇▇ ▇▇▇▇▇▇▇ or ▇. ▇. ▇▇▇▇▇▇▇ shall be
immediately remitted to CCNMS. All other maintenance and other
fees due with respect to Third Party Contracts shall be collected
by and paid to CCS and any party coming into possession of such
fees shall immediately remit them to CCS. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇. ▇.
▇▇▇▇▇▇▇ and TranSys Corporation jointly and severally warrant that,
all Third Party Contracts are in full force and effect without
default, and all fees due under all Third Party Contracts have been
collected through the respective Paid Through Dates and no other
fees have been paid or received for services after the Paid Through
Dates for the respective agreements.
6.9. ▇▇▇ ▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇▇, TranSys Corporation and CCNMS, and their
affiliates, jointly and severally, hereby release, acquit and
forever discharge CCS, from and against any and all claims,
demands, suits, controversies, losses, damages, costs, expenses
(including without limitation, attorneys' fees and expenses of
litigation), debts, obligations or liabilities, of any sort
whatsoever, contingent or fixed, known or unknown, arising directly
or indirectly out of, or in any way in connection with that certain
Heads of Agreement dated December 1, 1992, or the relationships
created thereby from the beginning of time through and for all time.
6.10.From time to time after the execution of this Agreement, ▇▇▇
▇▇▇▇▇▇▇, ▇. ▇. ▇▇▇▇▇▇▇, TranSys Corporation, and CCNMS and its
affiliates agree to use their
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best efforts to execute and deliver such other instruments of
conveyance, assignment, consent, transfer and delivery and
will take such other actions as reasonably requested by any other
party in order to more effectively obtain the approval, consent,
transfer, convey, assign and deliver to CCS, and permit CCS to
take possession and control, of the Third Party Contracts or to
enable CCS to exercise and enjoy all rights and benefits and to
assume the obligations under such Third Party Contracts.
7. Royalties.
7.1 Within the earlier of: (i) thirty (30) days after invoicing or
(ii) ten (10) days after receipt by CCS of the license fee charged
by CCS or a Dealer to the end user/licensee of TRAMS Software
(exclusive of reasonable fees that may be charged for installation,
training, maintenance, and support) CCS shall pay to CCNMS
royalties as provided for in Schedule B, attached hereto. Invoicing
shall occur no later than the date of the TRAMS Software is used in
a production environment by an end user. In the event CCS fails to
make a Royalty payment within twenty-one (21) days after such
payment is due, such overdue amount shall bear interest from the
date such payment was due at the U.S.A. prime rate as announced in
the Wall Street Journal on the date twenty-one (21) days after the
day such payment was due. In the event an audit conducted pursuant
to paragraph 11 below reveals the failure of CCS to make a Royalty
payment, the interest provisions of Paragraph 11.2 below shall
supersede the provisions of this paragraph relating to the payment
of interest.
7.2 Notwithstanding CCS' right to establish the license fee to be paid
by any particular end user/licensee, the Royalty to be paid on
account of a sublicense granted by CCS of TRAMS Software shall be
in accordance with Schedule B attached hereto and made a part
hereof.
7.3 The parties acknowledge and agree that CCS intends to enhance and
modify the TRAMS Software code on an ongoing basis and that the
Royalties provided for should be adjusted to reflect the CCS
contributions to the TRAMS Software code functionality and
capabilities. The method for adjusting the Royalties owed by CCS
shall be as follows:
(a) Royalties shall be reduced only as a result of modifying the
TRAMS Software, not by attaching the TRAMS Software, or parts
thereof, to another CCS application;
(b) The minimum Royalties provided for in Schedule B shall not
change until the TRAMS Software has been modified and enhanced
so that the number of lines of code contained in the Base Line
Release constitutes less than six percent (60%) of the
enhanced version;
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(c) Modifications and enhancements to the Base Line Release shall
be measured on a module-by-module basis (the modules being
defined in Section 1.1 hereof) or combinations thereof. For
example, if TRAMS/BC has 1,000 lines of code in the Base Line
Release and CCS adds an additional 1,000 lines of code to the
TRAMS/BC, then the Base Line Release shall constitute fifty
percent (50%) of the new TRAMS/BC.
(d) When the Base Line Release code of a given module no longer
constitutes at least sixty percent (60%) of the new module,
the Royalties owed pursuant to Schedule B shall be calculated
based on the percentage that the Base Line Release code is of
the enhanced module code.
For example:
Base Line Release code (whether
or not used in the enhanced model) = 1,000 lines
Enhanced Module Percentage = 2,000 lines
Percentage = 50%
So that fifty percent (50%) of the Royalty calculated pursuant
to Schedule B shall be owed. "Base Line Release" means (i) the
U.S. and U.K. version of Release 1.3 of the TRAMS Software
delivered to CCS by CCNMS as it existed on May 31, 1994;
(ii) the duplicate header module under development by ▇▇▇
▇▇▇▇▇▇▇ but not released as of May 31, 1994; and (iii)
modifications, enhancements and changes to the TRAMS Software
for the U.K. market delivered by CCN to CCS as of May 31, 1994.
7.4. For purposes only of computing the Royalty due under this
Agreement. the parties acknowledge and agree that any translation
of the Base Line Release TRAMS Software from the computer
language in which it is currently coded, into another computer
language, shall also be deemed to be Base Line Release TRAMS
Software. Nothing herein shall be used to construe the ownership
of any of such software, which shall be determined in accordance
with Section 8 below.
7.5 With each initial Royalty payment for a TRAMS Software module
according to Schedule B made under this Agreement, CCS shall
prepare and deliver to CCNMS a report showing the name of the
licensee or end user, the manner in which the TRAMS Software was
distributed (by direct license or through a Dealer), the
licensee fees charged for the Software, the amount charged for
other services, the amount of Royalty payments withheld as taxes,
if any, the rate of exchange used in calculating such Royalties
(if applicable), any adjustments in the Royalty pursuant to
paragraph 7.3 and the basis for calculating the adjustment. and
such other information and details as CCNMS may reasonably require
to verify the amounts due hereunder. For all subsequent royalty
payments, CCS shall be required to remit such Royalty Payment with
documentation sufficient to
8
identify it as being made pursuant to the original documentation
submitted. CCNMS is obligated to maintain confidentiality of all
data or information provided to it under this Paragraph 7.5 and
Paragraph 7.6 below.
7.6 If any reoccurring Royalties are due to CCNMS pursuant to
Schedule B then such payments shall be remitted to CCNMS within
ten (10) days of the end of each calendar quarter, along with
an initial report showing the name of the licensee or end user,
the manner in which the reoccurring Royalties were calculated
and the basis for such calculation, together with such other
information and details as CCNMS may reasonably require to
verify the amounts due hereunder. For all subsequent royalty
payments, CCS shall be required to remit such royalty payment
with documentation sufficient to identify all necessary
calculations as being made pursuant to the original documentation
submitted.
7.7. If the governing authority of any country shall impose any
withholding tax on any payment due hereunder, and shall require
that such tax be deducted from such payment, then CCS shall be
authorized to deduct from such payment the applicable tax and shall
pay the tax so deducted to the proper governmental authority, and
shall supply CCNMS with proof of such payment.
7.8. CCS shall, and shall require its Dealers, for a period of three
(3) years after the receipt of each Royalty payment, to keep true
and accurate records in such form and manner that with respect
thereto, Royalties owed hereunder to CCNMS may be readily and
accurately determined. Such records shall include, without
limitation, all information necessary for CCNMS's auditors to
prepare the reports provided for in paragraph 11.1 below. CCS
shall also keep copies of all license agreements entered into
between CCS or its Dealers with respect to TRAMS Software for
at least three (3) years from execution of such agreement. This
paragraph shall survive any termination of this Agreement. On
written notice, officers of CCNMS shall have the right to arrange
for a mutually agreeable time to inspect and make copies of all
such license agreements at the office of CCS during normal business
hours at the expense of CCNMS.
8. CCS Software Development.
8.1. The parties hereto agree that all modifications, enhancements or
other changes to the Base Line Release TRAMS Software made or
caused to be made by CCS or its affiliates are solely owned by and
are hereby assigned to CCS. Furthermore, the calculations or
allocations of Royalties made pursuant to Section 7.3 are made
solely with respect to such payments and have no bearing whatsoever
on ownership.
8.2 All software developed by CCS shall be and remain the exclusive
property of CCS.
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9. Proprietary Rights; Indemnification.
9.1. The parties acknowledge and agree that CCS is only granted the
right to use, reproduce. sublicense, create derivative works,
modify and distribute TRAMS Software and in accordance with
Section 8.1 above and subject to the provisions of this Agreement
and that CCNMS has and will retain all proprietary rights relating
to the Base Line Release. including any and all patent rights,
copyrights, copyright registrations, trade secrets, trademarks,
trademark registrations. related goodwill, and confidential and
proprietary information, except as otherwise set forth herein.
9.2. The parties acknowledge that two individuals, ▇.▇. ▇▇▇▇▇▇▇, and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (collectively the "Primary Developers"), have
been the primary developers of the TRAMS Software, and that they
have not been employed by CCNMS since the latter part of 1992.
Since that time, the TRAMS Software has been developed and
marketed by the Primary Developers and TranSys Corporation, a
Florida corporation. Accordingly, based in part on the
representations of the Primary Developers in Section 9.8 below,
CCNMS warrants to CCS, to the best of its knowledge (including the
knowledge of its current officers and directors), that (a) the
TRAMS Software does not infringe upon the U.S. copyrights or any
other copyrights worldwide of any other person or entity, (b) the
TRAMS Software was not misappropriated from another person or
entity, and (c) CCNMS has not granted a security interest, lien
or other encumbrance on the TRAMS Software (other than under that
certain Heads of Agreement, dated December 1, 1992, among TranSys
Corporation, the Primary Developers and CCNMS). EXCEPT AS EXPRESSLY
PROVIDED IN THIS SECTION 9.2, CCNMS MAKES NO REPRESENTATIONS OR
WARRANTIES OF ANY KIND, NATURE OR DESCRIPTION, EXPRESS OR IMPLIED,
WITH RESPECT TO THE TRAMS SOFTWARE OR THE DOCUMENTATION LICENSED
UNDER THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY
OF MERCHANTABILITY OR FITNESS OF THE TRAMS SOFTWARE OR
DOCUMENTATION FOR ANY PARTICULAR PURPOSE, AND CCNMS HEREBY
EXPRESSLY DISCLAIMS THE SAME. Without limiting the foregoing,
CCNMS disclaims any warranty regarding the operation or
functionality of the TRAMS Software, or any warranty regarding
any virus, hidden program, or intentionally harmful destructive or
disabling mechanism or device contained in the TRAMS Software.
9.3. In no event shall any party be liable to any other party for any
indirect, incidental or consequential damages arising in connection
with this Agreement, the TRAMS Software, or any license or
distribution thereof, except to the extent arising out of a breach
of Section 10 below.
9.4. CCNMS shall defend, indemnify and hold harmless CCS and its
affiliates and subsidiaries and their respective officers,
directors, employees and agents from all
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damages, liabilities and reasonable expenses (including reasonable
expenses and settlements resulting from any action or claim),
arising out of, connected with, or resulting in any way from:
(i) any representation made by CCNMS to the public or third parties
regarding the TRAMS Software; (ii) TRAMS Software licensed,
distributed or used not through or by CCS, or (iii) CCNMS's breach
of any warranties, undertakings or agreements in Sections 2, 3, 4,
5, 9.2 and 10.2. If any such claim or proceeding arises, any party
seeking indemnification hereunder shall give written notice of the
claim to CCNMS in a timely manner after it receives actual notice
of the existence thereof. CCNMS shall have the right at its
expense to employ counsel reasonably acceptable to such party to
defend against the claim, and to compromise. settle or otherwise
dispose of the claim, all at the expense of CCNMS; provided, that
no compromise or settlement of any claim admitting liability of or
imposing duties of performance upon any party entitled to
indemnification may be affected without the prior written consent
of such party. CCS will cooperate fully in any such action, making
available to CCNMS, at CCNMS's expense, books or records reasonably
necessary for the defense of the claim. If CCNMS does not avail
itself of the opportunity to defend against or resist the claim
within twenty (20) days after timely notice of such claim from
any party seeking indemnification hereunder (or such shorter time
specified in the notice as circumstances may dictate), such party
shall be free to investigate, defend, compromise. settle or
otherwise dispose of the claim in a reasonable manner, and incur
other reasonable costs in connection therewith, including
reasonable attorneys' fees, and CCNMS shall be responsible
therefor.
9.5 CCS acknowledges that except as specifically provided in this
Agreement, CCNMS has no control over the manner in which the TRAMS
Software, or any part thereof, is used, licensed or distributed
by CCS or its Dealers, and that CCNMS has no responsibility to
any person regarding the same. CCS shall defend, indemnify and
hold harmless CCNMS, its affiliates, and their respective officers,
directors, employees and agents from all damages, liabilities and
reasonable expense (including reasonable expenses and settlements
resulting from any action or claim), resulting from or arising out
of (i) any use, license, distribution, modification, enhancement
or change to the TRAMS Software or the Documentation, or any
derivative work thereof, except to the extent caused by a breach
by CCNMS of its warranties specified in paragraph 9.2 above, and
(ii) any claim that any Software provided by CCS to CCNMS or its
affiliates pursuant to this Agreement infringes any copyrights or
proprietary rights of any other person. If any such claim or
proceeding arises, CCNMS and the party seeking indemnification
hereunder shall give written notice of the claim to CCS in a
timely manner after it receives actual notice of the existence
thereof. CCS shall have the right at its expense to employ counsel
reasonably acceptable to such party to defend against the claim,
and to compromise, settle or otherwise dispose of the claim, all
at the expense of CCS; provided, that no compromise or settlement
of any claim admitting indemnification may be affected without the
prior written consent of CCNMS. CCNMS will cooperate fully in any
such
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action, making available to CCS at CCS's expense, books or records
reasonably necessary for the defense of the claim. If CCS does
not avail itself of the opportunity to defend against or resist
the claim within twenty (20) days after timely notice of such
claim from CCNMS seeking indemnification hereunder (or such shorter
time specified in the notice as circumstances may dictate), CCNMS
shall be free to investigate, defend compromise, settle or
otherwise dispose of the claim in a reasonable manner, and incur
other reasonable costs in connection therewith, including
reasonable attorney's fees, and CCS shall be responsible therefor.
9.6. Within ten (10) days of the date hereof, TranSys Corporation and
CCS shall deliver to CCNMS or its affiliated designee. the source
code (human readable) and all related documentation required to
utilize and maintain the same (the "Source Code Copies") for each
version of the TRAMS Software licensed under the Third Party
Contracts. CCS further agrees to promptly deliver to CCNMS all
modifications or enhancements which are licensed as part of the
TRAMS Software after the date hereof, after the delivery thereof
to any licensee. CCNMS hereby acknowledges that parts of the Source
Code Copies developed by CCS after the date hereof, may constitute
confidential and proprietary information of CCS, and CCNMS will,
or will cause its designee to, keep all of the Source Code Copies
in a secure access location. CCS grants CCNMS and its affiliates
a nonexclusive license to: (i) use, modify and copy and otherwise
utilize the Source Code Copies for its own use or for use in
connection with its Service Bureau processing; and (ii) use,
modify, copy and otherwise utilize the Source Code Copies to
provide maintenance to Third Party Contract licensees of the TRAMS
Software, if, and only if, (a) CCS fails to maintain the TRAMS
Software in accordance with the Third Party Contracts where
CCNMS has direct and then current liability to such sublicensees
pursuant to the Third Party Contracts, and (b) as a result thereof,
CCS is in breach of Third Party Contracts, and (c) CCS fails to
cure the breach of the Third Party Contracts within ten (10) days
of express written notice from CCNMS or its affiliate. Provided,
however, that nothing contained in this paragraph 9.6 shall be
interpreted to limit the right of CCNMS in any TRAMS Software
delivered to CCS pursuant to this Agreement.
9.7. Upon thirty (30) days' written notice of merger or sale of CCNMS,
or sale of the TRAMS Software and all assets related thereto to a
bona fide unaffiliated third party, if expressly requested at such
time by the licensee of a Third Party Contract and subject to the
terms and conditions set out above in subparagraph 9.6(ii), CCS
shall provide all CCS Source Code to a mutually agreeable third
party escrow holder on terms mutually agreeable which will permit
the Third Party Contract licensee to use the same under the
specified terms and conditions of the applicable Third Party
Contract, this Agreement and such escrow agreement, but only with
respect to the Third Party Contracts set out on Schedule C.
12
9.8. In order to permit CCNMS to provide the warranties in paragraph
9.2 above, TranSys Corporation and the Primary Developers jointly
and severally hereby represent and warrant to CCNMS that (a)
the TRAMS Software does not infringe upon the U.S. copyrights or
any other copyrights worldwide of any other person or entity,
(b) the TRAMS Software was not misappropriated from another person
or entity, and (c) none of them have granted a security interest,
lien or other encumbrance on the TRAMS Software.
10. Confidentiality.
10.1. (a) As used herein, the term "CCNMS Confidential Information" shall
mean any and all information of, about, or relating to the
TRAMS Software or the business of CCNMS, except for any such
information (i) that is or becomes known publicly or known
generally within the industry in which CCNMS operates by some
reason other than unauthorized disclosures, (ii) for which
CCNMS does not take reasonable efforts to protect its secrecy,
(iii) that is disclosed by CCNMS to a third party without
restrictions on use or disclosure, (iv) that is developed by
or for CCS independent from the knowledge of any CCNMS
Confidential Information, as evidenced by written documents and
records of CCS or (v) that is obtained from a third party who,
to the knowledge of CCS is not subject to obligations of
confidentially. CCNMS Confidential Information includes,
without limitation, the TRAMS Software and the Documentation.
(b) Except as permitted by this Agreement, CCS shall never make
any commercial use of any CCNMS Confidential Information, or
disclose to any third party, except as may be required by
law, any CCNMS Confidential Information.
10.2. (a) As used herein, the term "CCS Confidential Information" shall
mean any and all information of, about, or relating to the
CCS Software or the business of CCS, or updates or
enhancements TRAMS Software made by CCS after May 31, 1994,
except for any such information (i) that is or become known
publicly or known generally within the industry in which CCS
operates by some reason other than unauthorized disclosures,
(ii) for which CCS does not take reasonable efforts to
protect its secrecy, (iii) that is disclosed by CCS to a
third party without restrictions on use or disclosure, (iv)
that is developed by or for CCNMS independent from the
knowledge any CCS Confidential Information, as evidenced by
written documents and records of CCNMS, or (v) that is
obtained from a third party who, to the knowledge of CCNMS,
is not subject to obligations of confidentiality.
(b) Except as permitted by this Agreement, CCNMS shall never make any
commercial use of any CCS Confidential Information. or
disclose to any third party, except as may be required by
law, any CCS Confidential Information.
13
11. Audit Obligations.
11.1. Within one hundred twenty (120) days after the end of CCNMS
fiscal year, for each fiscal year in which payments are to be
made by CCS to CCNMS pursuant to this Agreement, CCNMS may retain
an independent audit firm to audit the records of CCS and to
prepare a report to be delivered to both parties simultaneously,
which report shall set forth the amounts paid and/or due but not
paid by CCS and to CCNMS pursuant to this Agreement during the
fiscal year. Subject to paragraph 11.2 below, CCNMS shall pay for
its own audit and the preparation of the report on its own
records.
11.2. In the event an audit reveals that additional amounts are owed by
CCS to CCNMS, the audit report shall specify the amount owed.
Within ten ( 10) days after receipt of the report, CCS shall pay
such amounts to CCNMS together with interest from the date the
audit report disclosing the underpayment is delivered at the rate
of eight percent (8%) per annum, together with the reasonable
costs of CCNMS for the audit. If such additional amounts owed by
CCS to CCNMS for such period are in excess of ten percent (10%)
of all amounts owed by CCS to CCNMS as determined by the audit
for such period, then CCS shall also reimburse CCNMS for the
reasonable cost of the audit.
12. Termination.
12.1. CCNMS may terminate this Agreement, including the appointment of
CCS as a distributor of the TRAMS Software and the License upon
written notice to CCS only in the event CCS materially breaches
any provision of this Agreement and such breach is not cured
within (i) thirty (30) days after receipt by CCS of notice from
CCNMS specifying nonpayment (with respect to a payment default)
or (ii) within sixty (60) days after receipt by CCS of notice
from CCNMS specifying such breach (with respect to any other
default).
12.2. All sublicenses granted to end users by CCS or the Dealers
pursuant to this Agreement prior to termination of this Agreement
and the license of CCS to continue using the TRAMS Software and
Documentation for supporting such end users shall continue
notwithstanding any termination of the licenses and this
Agreement for any reason.
12.3. The provisions of Sections 4.2(f) (with respect to support
services), 4.4, 6.6, 6.7, 7.5, 7.8, 8.1 and 9, 10, 11, and 12.2,
and any amounts due under this Agreement (including Royalties for
recurring license fee payments) and the right of CCNMS and its
affiliates to use CCS Source Code developed up to the date of
14
termination pursuant to paragraph 9 6 above, shall survive any
termination of this Agreement for any reason.
13. Third party Compliance. CCN Group Limited agrees to comply with
the terms of this Agreement, agrees to cause all entities
included within the definition of CCNMS to comply with the terms
of this Agreement. and hereby guarantees the performance of all
obligations required of CCNMS and such affiliates.
14. Applicable Law, Jurisdiction, Venue and Forum. The rights and
obligations of the parties under this Agreement shall not be
governed by the U.N. Convention on Contracts for the
International Sale of Goods. This Agreement shall be construed
and governed under and by the laws of the State of Florida. CCNMS
and CCS hereby agree that venue for any legal action authorized
hereunder shall be in Orange County, Florida. U.S.A., and that
jurisdiction shall be vested exclusively in the Circuit Court of
the Ninth Judicial Circuit in and for Orange County, Florida, or,
if appropriate, in the Federal District Court for the Middle
District of Florida, Orlando Division.
15. Currency. All monetary amounts described herein are based on
United States currency and all payments due hereunder shall be
made in United States currency to CCNMS, in care of MDS Decision
System, Inc. at the address specified in paragraph 22 below. All
Royalties due hereunder shall be calculated in U.S. dollars as
the same is booked by CCS for financial reporting purposes.
16. Arbitration.
16.1. Informal disputes between CCS and CCNMS shall be handled first by
referring the dispute to CCS' Chief Operating Officer or his
successor and CCNMS'S Chief Operating Officer or his successor to
resolve the dispute.
16.2. Notwithstanding paragraph 16.1 herein to the contrary, all
disputes of every kind and nature between and arising out of or
in connection with this Agreement as to the negotiation,
existence, construction, validity, interpretation or meaning,
performance, non-performance, enforcement, operation, breach,
continuance. or termination thereof shall be submitted to binding
arbitration pursuant to the then existing, commercial arbitration
rules of the American Arbitration Association.
(a) Each party shall select one disinterested arbitrator from a
list submitted by the American Arbitration Association, and
the two selected shall select a third arbitrator from the
list.
(b) Each party shall bear its own costs of arbitration.
(c) Arbitration hearings shall be conducted in Atlanta, Georgia,
and the award rendered by the arbitrators shall be in
writing and shall be final and binding on all parties to the
proceeding, and judgment on such award may be entered by
15
either party in the highest court of competent jurisdiction,
state or federal, in such jurisdiction.
(d) The parties agree that the provisions hereof shall be a
complete defense to any suit, action, or proceeding
instituted in any federal, state or local court or before
any administrative tribunal with respect to any controversy
or dispute arising during the period of this Agreement and
which is arbitrable as herein set forth. The arbitration
provisions hereof shall, with respect to such controversy or
dispute, survive the termination of this Agreement.
(e) Nothing herein contained shall be deemed to give the
arbitrators any authority, power, or right to alter, change,
amend, modify, add to, or subtract from any of the
provisions of this Agreement.
(f) The parties expressly agree that all trade secrets,
proprietary or confidential information of either party
shall be disclosed during arbitration only upon the issuance
of appropriate protective orders or agreements limiting the
disclosure or discoverability of such information outside of
the arbitration of this Agreement.
(g) Nothing in this Section 16 shall prevent the parties from
seeking or obtaining an injunction, preliminary or
otherwise, in a court of competent jurisdiction, against
infringement or unauthorized disclosure of a party's
intellectual or proprietary rights.
17. Assignment. Neither party may sell, assign, transfer, or otherwise
convey any of its rights (or delegate any of its duties) under this Agreement
without the prior written consent of the other which consent will not be
unreasonably withheld. Provided, however, that this Agreement may be assigned
to a subsidiary of CCS as provided in paragraph 1.2 above without prior
consent. and provided further that this Agreement may be assigned by CCNMS to
any of its affiliates under the same conditions and qualifications to be an
affiliate applicable to the assignment of a CCS affiliate without such
consent, provided that the affiliate agrees to be bound by the provisions of
this Agreement. (For purposes of the foregoing, an affiliate of CCNMS is any
entity of which the Great Universal Stores PLC owns, directly or indirectly,
at least fifty percent (50%) of the voting stock or in which it owns,
directly or indirectly, at least fifty percent (50%) of the voting interest.)
Any attempted sale, assignment, transfer, conveyance, or delegation in
violation of this paragraph shall be void and shall relieve the party not
making such attempt of any further liability hereunder.
18. Attorney's Fees. In the event any litigation, arbitration, or
controversy between the parties hereto arises out of, or relates to, this
Agreement, the prevailing party in such litigation arbitration, or
controversy shall be entitled to recover from the other party or parties all
reasonable attorneys' fees, expenses and suit costs, including those
associated with any appellate proceedings or post-judgment collection
proceedings.
16
19. Binding Effect. This Agreement shall be binding upon and shall inure to
the benefit of the parties and their permitted successors and assigns (as the
case may be).
20. Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter of this Agreement and
supersedes any and all previous agreements between the parties, whether
written or oral, with respect to such subject matter.
21. Invalid Provision. The invalidity, or unenforceability of any term or
provision of this Agreement or the nonapplication of any such term or
provision to any person or circumstance shall not impair or affect the
remainder of this Agreement, and the remaining terms and provisions hereof
shall not be invalidated but shall remain in full force and effect and shall
be construed as if such invalid, unenforceable, or nonapplicable provision
were omitted.
22. Notices. All notices, requests, waivers, and other communications
required or permitted to be given pursuant to this Agreement shall be in
writing and shall be deemed to have been duly given (i) at time of receipt of
by hand, or facsimile transmission, confirmed received by the recipient, (ii)
on the day of receipt if sent by prepaid telegram, or (iii) three (3)
business days (or seven (7) business days if to a foreign address) after
deposited in the U.S. mail, certified first-class mail, postage prepaid,
return receipt requested, sent or addressed, as the case may be, or by the
most nearly comparable method if mailed from or to a location outside of the
United States. as follows:
(a) If to CCS: CCS Technology Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Fax: 407/▇▇▇-▇▇▇▇
with a copy to ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
1600 Atlanta Financial Center
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇
Fax: 404/▇▇▇-▇▇▇▇
17
(b) If to CCNMS: CCN Management Systems, Inc.
c/o MDS Decision Systems, Inc.
▇▇▇ ▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Fax: 404/▇▇▇-▇▇▇▇
with a copy to: CCN Group, Ltd.
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
England
Attention: Mr. ▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇-▇▇▇-▇▇▇▇▇▇
Any party may change its address for purposes of this paragraph by giving
the other party or parties written notice of the new address in the manner
set forth above.
23. Relationship of Parties. Nothing contained in this Agreement shall
authorize, empower, or constitute any party as agent of any other party in
any manner; authorize or empower one party to assume or create any obligation
or responsibility whatsoever, express or implied, on behalf of or in the name
of any other party; or authorize or empower a party to bind any other party
in any manner or make any representation, warranty, covenant, agreement, or
commitment on behalf of any other party.
24. Section and Paragraph Headings. Section and paragraph headings used
throughout this Agreement are for reference and convenience and in no way
define, limit or describe the scope or intent of this Agreement or affect its
provisions.
25. Waiver or Modification. No waiver or modification of this Agreement or of
any covenant, condition, or limitation herein contained shall be valid unless
in writing and duly executed by the party to be charged therewith.
Furthermore, no evidence of any waiver or modification shall be offered or
received in evidence in any proceeding arbitration, or litigation between the
parties arising out of or affecting this Agreement or the rights or
obligations of any party hereunder, unless such waiver or modification is in
writing and duly executed as aforesaid. The provision of this paragraph may
not be waived except as herein set forth.
26. Drafting. The parties acknowledge and confirm that each of their
respective attorneys have participated jointly in the review and the revision
of this Agreement and that it has not been written solely by counsel for one
part. Therefore, the parties stipulate and agree that the rule of
construction, to the effect that any ambiguities are to be, or may be
resolved or construed against the drafting party, shall not be employed in
the interpretation of this Agreement to favor any party against another.
18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the Effective Date.
CCS TECHNOLOGY GROUP, INC. CCN MANAGEMENT SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By:
------------------------- ---------------------------
Title: President Title:
------------------------ ----------------------------
For value received, the undersigned hereby agrees to the provision of
paragraph 13 above.
CCN GROUP, LTD.
By:
-----------------------------
Title:
-----------------------------
For value received, the undersigned hereby agrees to the provisions of
this Agreement.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (SEAL)
-----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇.▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (SEAL)
-------------------------------------
▇. ▇. ▇▇▇▇▇▇▇▇▇▇ STAVROS
TRANSYS CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Title: President
19
SCHEDULE A
TRAMS SOFTWARE--TRADEMARKS AND TRADE NAMES
-------------------------------------------
TRAMS
TRAMS/BC
TRAMS/DE
TRAMS/AG
20
SCHEDULE B
LICENSE FEES
CCS shall pay CCNMS license fees on sublicense of TRAMS SOFTWARE based on
the nature of the sales and the nature of the sublicensee. This Agreement
contemplates six different categories of sublicensees. They are as follows:
(1) Sublicenses to customers that do not provide Service Bureau Services
("Non-Service Bureau Sublicenses"), and
(2) Sublicenses to customers that provide Service Bureau Services ("Service
Bureau Sublicenses") and
(3) Other Platform Based Products
(4) Multiple Sites
(5) Enterprise License
(6) Service Bureau
For purposes of this Schedule B, "Net Selling Price" shall mean the gross
sales sublicensed price pursuant to sublicensing TRAMS to third parties less
sales and foreign withholding taxes actually paid by CCS in connection with
the granting of the sublicense and shall not include any reasonable sums paid
for installation, support, training, maintenance, support software, changes
or modifications or any other similar services.
Category 1--Non-Service Bureau Sublicense royalties shall be determined
as follows:
(1) Stand Alone Product. If TRAMS Software is licensed as a stand alone
product to a third party (without enhancement by a non-TRAMS Software
product which is licensed separately by CCS, hereinafter, "Stand Alone
Product), royalty fee payable to CCNMS shall be equal to twenty percent
(20%) of the Net Selling Price, subject to the following minimums:
TRAMS SOFTWARE MODULES MINIMUM ROYALTY PAYMENT
-------------------------------------------------------- --------------------------------------------------------
(a): TRAMS (including TRAMS/AG)......................... $40,000*
(b): TRAMS/BC........................................... $50,000**
(c): TRAMS/DE........................................... $5,000*
(d): TRAMS/AG (without TRAMS)........................... No minimum twenty percent (20%) of the
Net Selling Priceof TRAMS/AG
* If sublicensed with another TRAMS module, the minimum fee for all TRAMS
modules licensed in the aggregate to the same sublicensee shall not exceed
$50,000.
** If TRAMS/BC is licensed to an existing TRAMS customer, then the Minimum
Royalty Payment would be $ 10,000.
21
(2) Integrated Product. If the TRAMS software is sublicensed as part of an
integrated product, e.g., a TRAMS Software module combined with a
non-TRAMS Software module creating an integrated marketable product which
is licensed separately by CCS for a single license fee (hereinafter
"Integrated Product"), then notwithstanding any facts to the contrary,
the Royalty payment due from CCS to CCNMS as follows:
TRAMS SOFTWARE MODULES NET SELLING PRICE ROYALTY PAYMENT
------------------------------------ ------------------------------------ ------------------------------------
(a)TRAMS and TRAMS/AG............... $200,000 $40,000
(b)TRAMS/BC......................... $250,000 $50,000**
(c)TRAMS/DE......................... $25,000 $5,000
(d)TRAMS/AG......................... No Minimum No Minimum
** If TRAMS/BC is licensed to an existing TRAMS customer, then the Royalty
Payment would be $10.000.
The Net Selling Price shall be deemed to be $250,000.00 and the minimum
Royalty Payment shall be deemed to be $50,000,000 where all modules are
licensed to a third party in the single agreement.
Category 2--Service Bureau Sublicense royalties shall be determined as
follows:
(1) Stand Alone Product. The Royalty Payment based on Net Selling Price due
from CCS to CCNMS for each sublicense issued to a Service Bureau shall be
computed based on the same terms and conditions described in Category 1
for Stand Alone Products. In addition, if the end-user license agreement
provides for recurring fees based on either an account or transaction
basis ("Recurring Fees"), then an additional Royalty Payment shall be due
from CCS to CCNMS equal to twenty percent (20%) of the Recurring Fees;
provided however, that the Recurring Fees on which the additional Royalty
Payment is calculated shall not include any reasonable installation.
support. training, maintenance, support software, changes, modifications
or any other similar service.
(2) Integrated Product. The assumed Net Selling Price and corresponding
Royalty Payment due from CCS to CCNMS for each sublicense issued to a
Service Bureau shall be computed based on the same terms and conditions
described in Category 1 for Integrated Products. In addition, if the
end-user license agreement provides for Recurring Fees, then an
additional Royalty Payment shall be due from CCS to CCNMS based on the
Recurring Fees which shall be determined by multiplying: (a) twenty
percent (20%) by (b) the percentage that the assumed Net Selling Price of
the TRAMS Software module constitutes of the total Net Selling Price for
the Integrated Product by (c) the Recurring Fees; provided however, that
the Recurring Fees on which the additional Royalty Payment is calculated
shall not include any reasonable installation, support. training.
maintenance, support Software, changes, modifications or any other
similar service.
22
CATEGORY 2 EXAMPLE:
CALCULATION OF ADDITIONAL AMOUNT TO BE PAID WITH RESPECT
TO RECURRING FEES:
RECURRING FEES
Additional Amount
% % OF LICENSE FEE COST PER TRANSACTION NUMBER OF TRANSACTIONS of Royalry Fee
------------------------------- ----------------------- ------------------------------------------------- ----------------
20% X.......................... ($250,000/$1,000,000) X ($.01 per transaction X 5,000,000 transactions) = $2,500
ASSUMPTIONS:
License Fee: $1,000,000; Transactions: 5.000,000; Cost per Transaction:
$.01.
If the licensed customer provides Service Bureau services, then Category
2 shall apply and Category 1 shall not apply.
Category 3--Other Platform Based Product.
The parties will reasonably work together to agree to separate prices for
other platform based (e.g. PC based system) with respect to the
implementation of systems for the TRAMS Software if developed by either
or both parties. Prior to setting of the price for such PC based product,
the parties shall review the price structure together.
Category 4--Multiple Sites:
For subsequent sites, the Royalty due from CCS to CCNMS shall be computed
as follows:
(a) Stand Alone Product. The Royalty payment shall be twenty percent
(20%) of the actual Net Selling Price and shall not be subject to a
Minimum Royalty Payment.
(b) Integrated Product. The Royalty payment shall be calculated by
multiplying: (i) twenty percent (20%) by (ii) the percentage that the
assumed Net Selling Price of the TRAMS Software module listed in Category
1, paragraph (2) constitutes of the total Net Selling Price for the
Integrated Product for the first site license by (iii) the Net Selling
Price for the subsequent site.
23
CATEGORY 4 EXAMPLE--Integrated Product
FIRST SITE SECOND SITE
% LICENSETRAMS/TOTAL LICENSE ROYALTY
----------------------------------------------------- ---------------------------- ------------------ ---------
20% X................................................ ($250,000/$1,000,000) $800,000 = $40,000
c) Recurring Fees. If the end-user license agreement for a Service Bureau
provides for Recurring Fees for a second or subsequent site, the Royalty
payment shall be calculated using the same formulas defined under
Category 2 for Stand Alone Products or Integrated Products, as applicable
Category 5--Enterprise License:
The parties will reasonably cooperate in setting an enterprise license
fee (a company-wide fee for multiple sites) which shall generally
reflect the relative scope and scale of such enterprise in proportion to
the number of sites and products utilized.
Category 6--Service Bureau:
At some future date, should CCS desire to use TRAMS Software in its
internal Service Bureau processing, it will enter into negotiations for
CCNMS to license the TRAMS Software for such use, and CCNMS agrees to
license such TRAMS Software on terms no less favorable than granted to
other users or licensees for use in Service Bureau processing.
24
SCHEDULE C
THIRD PARTY CONTRACTS
1. GENERAL ELECTRIC COMPANY
2. FIRST STAR INFORMATION SERVICES
3. Toronto Dominion Bank
25
SCHEDULE D
CCN Group, Ltd. Guarantees
26
