EXHIBIT 10.6
Confidential Treatment has been granted with respect to portions of the
agreement indicated with an asterisk [*]. A complete copy of this agreement,
including the redacted terms, has been separately filed with the Securities
and Exchange Commission.
TECHNOLOGY, SERVICES AND LICENSE AGREEMENT ("Agreement")
This TECHNOLOGY, SERVICES AND LICENSE AGREEMENT (this "Agreement"),
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effective as of September 1, 1998 (the "Effective Date"), is entered into by and
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between xxXxxxx.xxx, Inc., a Delaware Corporation, having an address at 0000
Xxxxx xx xxx Xxxx, Xxxxx 000, Xxxxxx, XX 00000 ("pcOrder") and Trilogy
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Software, Inc., a Delaware Corporation, having an address at 0000 Xxxx Xxxxxxxxx
Xxxxx, Xxxxxx, Xxxxx 00000 ("Trilogy").
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RECITALS
WHEREAS, when used in this Agreement, capitalized terms shall have the
respective meanings set forth in Schedule A (attached hereto) of this Agreement
and elsewhere in this Agreement;
NOW, in consideration of the mutual covenants and promises contained
herein, pcOrder and Trilogy ("the parties") hereby agree as follows.
1.0 Access, Licenses, Royalties & Ownership
1.1 Access by pcOrder. Trilogy shall give pcOrder access to Object Code
forms of (and, with regard to data, database forms of):
(a) no later than October 1, 1998, the Material identified in Schedule D,
in the versions thereof existing on or before the Effective Date;
(b) any and all updates to, changes to, and new releases of the Material
identified in Schedule D, to the extent that such updates, changes, and new
releases are by Trilogy (or any one or more of its Affiliates other than
pcOrder); provided however that such obligation shall automatically expire five
(5) years after a Trigger Event (but in no event shall such obligation expire
before September 1, 2008 after a Trigger Event);
(c) any and all Trilogy Products (except Trilogy Products that satisfy only
subparagraph (c)(iii) in the definition of Trilogy Product in Schedule A);
provided however that such obligation shall automatically expire five (5) years
after a Trigger Event (but in no event shall such obligation expire before
September 1, 2008 after a Trigger Event); and further provided however that,
after a Trigger Event, such obligation shall apply only to the extent that
Trilogy Products are of a same, similar, replacement or equivalent general type
as Pre-Trigger Products; and
(d) during the first five (5) years immediately following a Trigger Event
(but in any event at least until September 1, 2008 following a Trigger Event),
any Computer E-Commerce Product of Trilogy (or any one or more of its Affiliates
other than pcOrder);
provided however that Trilogy shall have no obligation to give access to any
market analysis data (or other Material to the extent embodying such data).
No later than general availability to Trilogy's general customer base of any
such update, change, new release, Trilogy Product, or Computer E-Commerce
Product, Trilogy shall provide a written notice of such availability to pcOrder.
Before or after such notice, Trilogy's accessibility obligations under
paragraphs (b), (c) and (d) above shall be in effect, but only to the extent
that such update, change, new release, Trilogy Product, or Computer E-Commerce
Product is (or is reasonably expected to be) generally available to Trilogy's
general customer base, and subject however to the condition that: (i) pcOrder
provides Trilogy with thirty-one (31) days' advance written notice of pcOrder's
specific (e.g. by product name) request for such access, and (ii) Trilogy has
given at least one non-party customer (other than Trilogy's Affiliates) access
to such requested update, change, new release, Trilogy Product, or Computer E-
Commerce Product. Under this Agreement, pcOrder is permitted to provide Trilogy
with such request no more frequently than once per calendar month. If pcOrder
requests earlier access to any such update, change, new release, Trilogy
Product, or Computer E-Commerce Product, then Trilogy shall negotiate in good
faith with pcOrder on a case-by-case basis to give commercially reasonable as-
needed access.
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pcOrder acknowledges that, as between the parties and pcOrder's Affiliates,
predecessors or successors, Trilogy solely owns (a) the Material identified in
Schedule D, in the forms (and versions) thereof existing on or before the
Effective Date, and (b) any and all Intellectual Property Rights that may cover
(or be available in, or result from, or be granted pursuant to) such Material.
1.2 Access by Trilogy. pcOrder shall give Trilogy access to Object Code
forms of (and, with regard to data, database forms of):
(a) no later than October 1, 1998, the Material identified in Schedule E,
in the versions thereof existing on or before the Effective Date;
(b) any and all updates to, changes to, and new releases of the Material
identified in Schedule E, to the extent that such updates, changes, and new
releases are by pcOrder (or any one or more of its Affiliates other than
Trilogy); provided however that such obligation shall automatically expire five
(5) years after a Trigger Event (but in no event shall such obligation expire
before September 1, 2008 after a Trigger Event); and
(c) any and all pcOrder Products (except pcOrder Products that satisfy only
subparagraph (c) in the definition of pcOrder Product in Schedule A); provided
however that such obligation shall automatically expire five (5) years after a
Trigger Event (but in no event shall such obligation expire before September 1,
2008 after a Trigger Event);
provided however that pcOrder shall have no obligation to give access to any
market analysis data (or other Material to the extent embodying such data).
No later than general availability to pcOrder's general customer base of any
such update, change, new release, or pcOrder Product, pcOrder shall provide a
written notice of such availability to Trilogy. Before or after such notice,
pcOrder's accessibility obligations under paragraphs (b) and (c) above shall be
in effect, but only to the extent that such update, change, new release, or
pcOrder Product is (or is reasonably expected to be) generally available to
pcOrder's general customer base, and subject however to the condition that: (i)
Trilogy provides pcOrder with thirty-one (31) days' advance written notice of
Trilogy's specific (e.g. by product name) request for such access, and (ii)
pcOrder has given at least one non-party customer (other than pcOrder's
Affiliates) access to such requested update, change, new release, or pcOrder
Product. Under this Agreement, Trilogy is permitted to provide pcOrder with
such request no more frequently than once per calendar month. If Trilogy
requests earlier access to any such update, change, new release, or pcOrder
Product, then pcOrder shall negotiate in good faith with Trilogy on a case-by-
case basis to give commercially reasonable as-needed access.
Trilogy acknowledges that, as between the parties and Trilogy's Affiliates,
predecessors or successors, pcOrder solely owns (a) the Material identified in
Categories B-1 and B-2 of Schedule E, in the forms (and versions) thereof
existing on or before the Effective Date, and (b) any and all Intellectual
Property Rights that may cover (or be available in, or result from, or be
granted pursuant to) such Material. With regard to the Material identified in
Category A of Schedule E, the parties shall cooperate in good faith to determine
whether specific portions of such Material (and Intellectual Property Rights
that may cover (or be available in, or result from, or be granted pursuant to)
such portions) are: (a) solely-owned by Trilogy with a license under Section
1.4 to pcOrder, (b) solely-owned by pcOrder with a license under Section 1.4 to
Trilogy, or (c) owned jointly by the parties in accordance with Schedule B.
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1.3 External license
(a) pcOrder. Subject to Section 1.10 but notwithstanding anything else to
the contrary in this Agreement, to the extent that Material licensed by Trilogy
to pcOrder under Section 1.4 is (or becomes) embodied by pcOrder in any one or
more pcOrder Products:
effective as of the moment when such Material is so embodied, Trilogy
further hereby grants to pcOrder a nonexclusive, irrevocable, perpetual,
worldwide right and license under Trilogy's Intellectual Property Rights
(covering, granted pursuant to, available in, or resulting from such
Material) to do the pcOrder Activities for any purpose;
subject however to the condition that pcOrder completely pays amounts owed to
Trilogy under Sections 2.0 and 3.0 of this Agreement.
Notwithstanding anything to the contrary in this Agreement, to the extent
that pcOrder delivers (or authorizes delivery of) Material to a non-party (other
than pcOrder's Affiliates) before a Trigger Event, such non-party's licenses
(and sublicenses) to such Material (and under Intellectual Property Rights
covering, granted pursuant to, available in, or resulting from such Material)
shall continue in full force and effect in accordance with their terms and
conditions, irrespective of such Trigger Event.
(b) Trilogy. Subject to Section 1.10 but notwithstanding anything else to
the contrary in this Agreement, to the extent that Material licensed by pcOrder
to Trilogy under Section 1.4 is (or becomes) embodied by Trilogy in any one or
more Trilogy Products:
effective as of the moment when such Material is so embodied, pcOrder
further hereby grants to Trilogy a nonexclusive, irrevocable, perpetual,
worldwide right and license under pcOrder's Intellectual Property Rights
(covering, granted pursuant to, available in, or resulting from such
Material) to do the Trilogy Activities for any purpose;
subject however to the condition that Trilogy completely pays amounts owed to
pcOrder under Sections 2.0 and 3.0 of this Agreement.
Notwithstanding anything to the contrary in this Agreement, to the extent
that Trilogy delivers (or authorizes delivery of) Material to a non-party (other
than Trilogy's Affiliates) before a Trigger Event, such non-party's licenses
(and sublicenses) to such Material (and under Intellectual Property Rights
covering, granted pursuant to, available in, or resulting from such Material)
shall continue in full force and effect in accordance with their terms and
conditions, irrespective of such Trigger Event.
To the extent this Section 1.3 provides Licensee (as defined in Section
1.4) with any greater right or license than Section 1.4 and Schedule C of this
Agreement, Licensee shall have such greater right and license provided by this
Section 1.3.
1.4 Internal license. Notwithstanding anything to the contrary in this
Agreement, to the extent that Material solely owned (as between the parties) by
a party ("Licensor") is disclosed or delivered to the other party ("Licensee")
during the term of this Agreement in connection with the performance of
activities under this Agreement or before the term of this Agreement, and to the
extent that Material is owned jointly by Licensor and Licensee:
effective as of the moment when such Material is so disclosed or so
delivered, Licensor hereby grants to Licensee a nonexclusive,
irrevocable, perpetual, worldwide, fully paid-up right and license under
Licensor's Intellectual Property Rights (covering, granted pursuant to,
available in, or resulting from such Material) to do any of the
following, but only on behalf of and for the sole benefit of Licensee
and/or Licensor:
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(a) to use, make, reproduce, and/or prepare derivative works based upon,
such Material and/or any one or more of such derivative works, and/or
(b) to sublicense any one or more non-parties to do so;
subject however to the condition that, to the extent such Material is
Confidential Information, Licensee treats such Material as Licensor's
Confidential Information under Schedule C of this Agreement even while
exercising such right and license.
1.5 Ownership. Subject to any right of any non-party, if either party
(through its employees or otherwise) solely creates, invents or discovers
Material before or during the term of this Agreement: (a) such party ("owning
party") shall solely own such Material, notwithstanding disclosure or delivery
to the other party of such Material; (b) the owning party shall have the right
to obtain and hold in its own name any and all Intellectual Property Rights that
may cover, (be available in, or result from, or be granted pursuant to) such
Material; and (c) the other party shall have no license, sublicense, right or
immunity, either directly, indirectly, or by implication, estoppel or otherwise,
under such Intellectual Property Rights, except as might be expressly provided
elsewhere in this Agreement or in a separate written agreement.
Joint ownership, if any, shall be controlled by Schedule B (attached
hereto) of this Agreement.
For future projects in which both parties cooperate toward jointly
creating, inventing or discovering Material, the parties shall negotiate in good
faith on a project-by-project basis to determine the extent to which such
Material (and Intellectual Property Rights that may cover (or be available in,
or result from, or be granted pursuant to) such Material) should be:
(a) solely-owned by one party with a license under Section 1.4 to the other
party; or
(b) owned jointly by the parties in accordance with Schedule B.
In such negotiation, the parties shall fairly consider the extent and
significance of each party's respective contribution to the project, including
for example but not limited to each party's respective level of funding,
resources, pre-existing Material, and origination of initial concept. To the
extent the parties determine that such Material (and Intellectual Property
Rights that may cover (or be available in, or result from, or be granted
pursuant to) such Material) should be owned jointly by the parties in accordance
with Schedule B, the parties shall negotiate in good faith to determine the
extent to which one party's or both parties' rights therein should be:
(a) royalty-bearing in accordance with Section 3.0 and Section B.1 of
Schedule B; or
(b) fully paid-up notwithstanding Section 3.0 and Section B.1 of Schedule
B.
1.6 Proprietary Markings. Licensee represents and warrants that it has
retained, and shall retain (i.e. shall not remove, alter, deface, obscure or
destroy), any and all proprietary and confidential notices and markings (e.g.
including but not limited to Licensor's trademark, service xxxx, tradename,
patent and copyright notices) on any and all originals and permitted copies of
Licensor's Material.
1.7 Export Laws. Licensee represents, warrants, agrees and certifies that
it (a) has complied with, and shall comply with, the United States Foreign
Corrupt Practices Act (regarding, among other things, payments to government
officials) and all export laws and rules and regulations of the United States
Department of Commerce or other United States or foreign agency or authority,
and (b) has not, directly or indirectly, imported, exported, re-exported, or
transshipped any of Licensor's Material in violation of any such laws, rules or
regulations, and (c) shall not (and has not knowingly permitted any non-party
to, and shall not knowingly permit any non-party to), directly or indirectly,
import, export, re-export, or transship any of Licensor's Material in violation
of any such laws, rules or regulations.
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1.8 Freedom of Action. Except as expressly provided to the contrary
elsewhere in this Agreement, this Agreement shall not restrict either party from
(a) entering into or having similar agreements with non-parties, (b) do any
activity in relation to competitive products and services, e.g. including but
not limited to designing, developing, manufacturing, acquiring, advertising,
marketing, selling, distributing, licensing, sublicensing or using competitive
products and services, and (c) conducting its business in any manner it chooses.
1.9 Source Code Escrow. Source Code escrow shall be controlled by Schedule
F (attached hereto) of this Agreement.
1.10 No Reverse Assembly. Notwithstanding anything to the contrary in this
Agreement, to the extent legally permissible, Licensee represents and warrants
that it (a) has not reverse assembled, reverse compiled, decrypted, extracted,
or otherwise attempted to discover any Source Code (or other underlying
Material) of Material licensed by Licensor to Licensee under Section 1.4, (b)
shall not (and has used and shall use commercially reasonable efforts to ensure
that its licensees and sublicensees do not, and has not knowingly caused or
permitted any other non-party to, and shall not knowingly cause or permit any
other non-party to) reverse assemble, reverse compile, decrypt, extract, or
otherwise attempt to discover any Source Code (or other underlying Material) of
Material licensed by Licensor to Licensee under Section 1.4.
2.0 Services
2.1 Terms, Conditions, Fees & Invoices. Upon either party's request, the
parties shall negotiate in good faith regarding terms and conditions for a party
("consulting party") to perform services reasonably requested by the other party
("requesting party"); provided however that such obligation shall automatically
expire seven (7) years after a Trigger Event (but in no event shall such
obligation expire before September 1, 2010). Neither party shall have any
obligation to request any such services. In exchange for such services, the
requesting party shall pay fees to the consulting party, but such fees shall not
exceed the consulting party's then current standard rates for the consulting
party's actual reasonable time expended directly in the consulting party's
performance of such services.
On a monthly basis only, no later than thirty-one (31) days after the end
of a month in which the consulting party performs services for the requesting
party under this Section 2.1, the consulting party shall provide to the
requesting party an invoice that itemizes all hours (in such month) for which
the consulting party has a bona fide reasonable good faith belief that payment
is due under this Section 2.1. Within thirty-one (31) days after the requesting
party's receipt of such invoice, the requesting party shall pay the consulting
party for all fees itemized in such invoice, except to the extent that the
requesting party notifies the consulting party of a bona fide reason for the
requesting party's reasonable good faith belief that such invoice is not
accurate (in which event the parties shall use commercially reasonable efforts
to cooperate in good faith with one another toward investigating and resolving
any such reason and non-payment).
2.2 Non-Parties. Subject to the requirements of Exhibit C (attached
hereto) of this Agreement, each party ("retaining party") may, at its sole and
exclusive discretion, retain one or more non-parties to perform services under
this Agreement. Notwithstanding the immediately preceding sentence, to the
extent that such retained non-parties (other than Affiliates of the retaining
party and their respective employees) are not employees of the retaining party:
(a) the retaining party shall promptly identify, in writing, such retained
non-parties to the other party; and
(b) at any time, such other party shall have the right to object in
writing to the retaining party's retention of any one or more of such
retained non-parties who is not performing in a manner reasonably
satisfactory to such other party and, in such event, the retaining
party shall no longer retain such non-party to perform services under
this Agreement.
The retaining party shall ensure that such retained non-parties are covered
by the minimum state-mandated workers' compensation insurance.
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The retaining party shall be responsible for and shall make all payments to
such retained non-parties.
2.3 Progress Reports. To the extent reasonably necessary for enabling
compliance with regulatory requirements of Governmental Authorities, the parties
shall cooperate in good faith to provide one another with progress reports
concerning the performance of activities under this Agreement.
2.4 Inspection. During the term of this Agreement, but only at such times
and under such conditions as reasonably requested in advance, each party
("hosting party") shall permit the other party's representatives to visit and
reasonably inspect the hosting party's properties and computer system (but only
to the extent reasonably relating to this Agreement), and interview the hosting
party's employees on topics reasonably relating to this Agreement. Such visits
are not to unreasonably interfere with the hosting party's normal business
operations.
2.5 Security. To the extent that a party ("accessing party") accesses the
other party's computer systems, the accessing party shall fully and completely
comply with any and all of such other party's standard vendor and employee
security policies, procedures, and requirements existing from time to time, to
the extent that such other party notifies the accessing party reasonably in
advance thereof.
2.6 Expenses. The requesting party shall reimburse the consulting party
for the consulting party's reasonable actual expenses (e.g. costs of travel,
food, and lodging) that the consulting party directly incurs in performing
activities for the requesting party under this Agreement, but only to the extent
that such expenses are preapproved in writing by the requesting party.
On a monthly basis only, no later than thirty-one (31) days after the end
of a month in which the consulting party performs activities for the requesting
party under this Agreement, the consulting party shall provide to the requesting
party (a) an invoice that itemizes all expense reimbursements for such month
that the consulting party believes are due under this Agreement and (b) original
receipts for all such expenses reimbursements. Within thirty-one (31) days
after the requesting party's receipt of such invoice, the requesting party shall
reimburse the consulting party for all the requesting party-approved expenses
itemized in such invoice, except to the extent that the requesting party
notifies the consulting party of a bona fide reason for the requesting party's
reasonable good faith belief that such invoice is not accurate (in which event
the parties shall use commercially reasonable efforts to cooperate in good faith
with one another toward investigating and resolving any such reason and non-
payment).
2.7 Management. The consulting party shall report directly to an
individual designated in writing by the requesting party and shall perform
activities in accordance with reasonable instructions, directions, requests,
rules and regulations issued during the term of this Agreement by such
individual. Each party agrees that the other party shall establish its working
hours and work environment, as well as its specific strategies, actions, and
methodologies for performing required activities under this Agreement. Each
party agrees that any property situated on the other party's premises, including
for example but not limited to material, filing cabinets, desks or other work
areas, is subject to inspection by such other party personnel at any time with
or without notice.
2.8 Cooperation. Using commercially reasonable efforts, the requesting
party shall supply to the consulting party reasonable access to the requesting
party's personnel, resources and information reasonably requested by the
consulting party in connection with the consulting party's activities under this
Agreement, including but not limited to (a) reasonable access to the requesting
party's computing network via ISDN modem in compliance with Section 2.5 and (b)
reasonable access to the requesting party's appropriate personnel and
documentation relating to the consulting party's activities under this
Agreement.
2.9 Maintenance Services. Maintenance Services shall be controlled by
Schedule G (attached hereto) of this Agreement.
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3.0 Payment
3.1 Royalty. Within thirty-one (31) days after the end of each month
during the term of this Agreement, Licensee (as defined in Section 1.4) shall
pay the Royalty to Licensor (as defined in Section 1.4), and Licensee shall
deliver to Licensor a monthly written royalty report that details the underlying
facts in support of the Royalty calculation. Such report shall be in a form and
format to be mutually agreed upon by Licensor and Licensee.
3.2 Definitions.
"Royalty" shall mean the product of the Royalty Rate multiplied by NS (i.e.
net sales) owed to Licensee (or any one or more of its Affiliates other than
Licensor).
"Royalty Rate" shall mean:
(a) [*]
(b) [*]
(c) [*]
"NS" shall mean only fees computed according to the following formula:
NS = GS - [DED (GS/(GS+OF))].
"GS" (i.e. gross sales) shall mean only fees owed to Licensee (or any one
or more of its Affiliates other than Licensor) by any non-party (other than
Licensee's Affiliates) during the immediately preceding month for:
(a) a license (or sublicense) to a Licensee Product,
(b) a Data Maintenance service in connection with a Licensee Product,
(c) a software maintenance service in connection with a Licensee Product,
or
(d) an on-line subscription service in connection with a Licensee Product;
provided however that:
* such fees shall be no less than fair and reasonable fees in view of
the fair and reasonable market value of such Licensee Product; and
* GS shall exclude any fee (to the extent reasonable) owed to Licensee
(or any one or more of its Affiliates other than Licensor) solely for
(i) a license (or sublicense) to any Material other than a Licensee
Product or (ii) a service solely in connection with such Material.
"Licensee Product" shall mean:
(a) if Trilogy is Licensee, a product (e.g. Trilogy Product) in which more
than an insignificant amount (as reasonably determined in good faith
by both parties) of Material licensed by pcOrder to Trilogy under
Section 1.4 is (or becomes) embodied; and
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(b) if pcOrder is Licensee, a product (e.g. pcOrder Product) in which more
than an insignificant amount (as reasonably determined in good faith
by both parties) of Material licensed by Trilogy to pcOrder under
Section 1.4 is (or becomes) embodied.
"GS Transaction" shall mean any particular transaction in which any GS is
owed to Licensee (or any one or more of its Affiliates other than Licensor).
"GS Transaction Fee" shall mean any fee that is part of any GS Transaction.
"OF" (i.e. other fees) shall mean only GS Transaction Fees, to the extent
reasonable for such GS Transaction, owed during the immediately preceding month
to Licensee (or any one or more of its Affiliates other than Licensor) solely
for (i) a license (or sublicense) to any Material other than a Licensee Product
or (ii) a service solely in connection with such Material
"DED" (i.e. deductions) shall mean (a) any credit, discount, refund or
rebate (to any one or more non-parties other than Licensee's Affiliates)
actually granted during the immediately preceding month as part of a GS
Transaction by Licensee (or by any one or more of its Affiliates other than
Licensor), to the extent reasonable for such GS Transaction, and (b) any sales,
use, value added or other tax (other than franchise tax or income tax) owed
during the immediately preceding month as part of a GS Transaction by Licensee
(or by any one or more of its Affiliates other than Licensor) to a Governmental
Authority.
3.3 Conversion. In calculating the Royalty due for any transaction made
in any foreign currency, conversion to U.S. dollars shall be at a rate of
exchange mutually agreed by the parties.
3.4 Audit. During the term of this Agreement and for a period of two (2)
years thereafter, each party and its Affiliates shall keep full and accurate
books and records relating to Sections 3.1, 3.2 and 3.3, in accordance with
standard business practices in the computer industry.
No more frequently than once per twelve (12) month period (as measured on a
rolling basis), either party ("auditing party") shall have the right to audit
such books and records of the other party ("audited party") and the audited
party's Affiliates), at the auditing party's expense, by providing thirty-one
(31) days' advance written notice to the audited party. The auditing party may
conduct such audit either itself or through a reputable certified public
accounting firm subject to the obligations of Schedule C.
The audited party shall reasonably assist the auditing party in conducting
such audit, without charge, and shall make such books and records available for
inspection and copying and shall make personnel available for interviews as may
be reasonably necessary to allow the auditing party to perform the audit.
If any such audit reveals that the audited party has failed to properly
account for and make at least ninety-five percent (95%) of all payments due
under Section 3.1 to the auditing party, then the audited party shall, in
addition to immediately paying the auditing party such past due payments,
promptly reimburse the auditing party for its actual reasonable expenses
incurred in conducting such audit.
3.5 Freedom. Neither party is obligated to announce or market any product
or service, and neither party guarantees the success of its marketing efforts
(if any). Each party, at its sole and exclusive discretion, (a) shall be
independently free to establish the prices and fees for its products and
services and (b) may offer discounts against such prices and fees.
3.6 Dollar amounts. Under this Agreement, all dollar amounts shall be
paid within the United States in U.S. dollars by check drawn on (or wire
transfer from) a United States bank account.
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4.0 Term and Termination
4.1 Term. The term of this Agreement shall begin on the Effective Date
and shall continue in effect until terminated by a party under Section 4.2 of
this Agreement.
4.2 Breach Termination. If a party ("breaching party") breaches this
Agreement (e.g. including but not limited to royalty payment obligations under
Section 3.0, or any other representation, warranty, covenant, obligation or
agreement contained in this Agreement), then the other party ("terminating
party") may unilaterally at its sole and exclusive discretion terminate this
Agreement by providing the breaching party with a written notice of the
termination that describes the breach. Such termination shall become effective
thirty-one (31) days after the breaching party receives such written notice,
unless such breach is cured within such thirty-one (31) days. If such breach
(other than breach of a payment obligation) by its nature cannot be cured within
such thirty-one (31) days, but can be cured within an additional sixty-two (62)
day period thereafter, the breaching party may avoid such termination by taking
reasonable and diligent steps to cure such breach, notifying the terminating
party of such steps, progressing toward completion of such steps, and promptly
completing such cure within such additional sixty-two (62) day period.
Such termination shall be in addition to any other remedies to which the
terminating party may be entitled. Termination of this Agreement shall be
without penalty to the terminating party.
A party who is responsible for any inadvertent unauthorized disclosure or
delivery of the other party's Confidential Information shall not be deemed to
have breached this Agreement if such responsible party satisfies its obligations
under Section C.5.
4.3 Termination Based on Business Status. A party (unilaterally at its
sole and exclusive discretion) may terminate this Agreement by providing the
other party with a written notice of the termination if such other party: (a)
becomes insolvent; (b) makes a general assignment for the benefit of creditors;
(c) is adjudicated bankrupt; (d) admits in writing its insolvency or inability
to pay its debts or perform its obligations in the ordinary course of business
as they mature; or (e) becomes the subject of any voluntary or involuntary
proceeding in bankruptcy, liquidation, dissolution, receivership, attachment or
composition or general assignment for the benefit of creditors, provided however
that such involuntary proceeding was not dismissed within sixty-two (62) days
after it was instituted. Such termination shall become effective as of receipt
by such other party of such written notice. If any of the events described in
this Section 4.3 occur with respect to a party, such party shall promptly notify
(in writing) the other party about the occurrence.
4.4 Survival. Sections 1.3, 1.4, 1.5, 1.6, 1.7, 1.8, 1.9, 1.10, 3.0, 4.0,
5.0, 6.0, 7.0 and 8.0, and Schedules A, B, C, D, E, F and G shall survive
termination of this Agreement in accordance with their terms and conditions.
With respect to payment obligations that arise before the date of termination of
this Agreement, such payment obligations shall survive termination of this
Agreement. Except for such payment obligations, termination of this Agreement
shall be without payment of any fee. A payment obligation shall be deemed to
arise when such payment is scheduled to be paid under this Agreement.
Irrevocable licenses shall not be affected by termination of this Agreement.
5.0 Warranty
5.1 Representations and Warranties. Notwithstanding anything to the
contrary in this Agreement, each party ("warranting party") represents and
warrants that:
(a) the warranting party has all right, power, and authority to enter
into this Agreement;
(b) there are no liens, encumbrances, or claims pending or threatened
against the warranting party (or anyone else to the warranting
party's knowledge) that relate to the rights and licenses granted by
the warranting party in this Agreement;
(c) the warranting party has access to expertise, knowledge, experience,
ability, and know-how to perform all of its obligations under this
Agreement;
9
(d) all services performed by the warranting party under this Agreement
shall be performed in a professional and workmanlike manner; and
(e) to the extent that the warranting party delivers Material to the other
party under Section 1.1, Section 1.2 or Section 2.0, and subject to
the condition that such other party completely pays amounts owed to
the warranting party under Sections 2.0 and 3.0, to the warranting
party's knowledge after reasonable inquiry:
(i) the warranting party (1) either owns or has sufficient rights
to deliver such Material to such other party, and (2) either
owns or has sufficient rights to grant the licenses (as granted
elsewhere in this Agreement) under any and all Intellectual
Property Rights that may cover (or be available in, or result
from, or be granted pursuant to) such Material;
(ii) such Material neither infringes nor violates any non-party's
valid Intellectual Property Right;
(iii) such Material does not contain any "back door", "time bomb",
"drop dead device", or other computer software routines
designed to permit access to or use of such Material or such
other party's computer systems by an unauthorized Person, or to
disable or erase at any time such Material or data processed
therewith;
(iv) such Material does not contain any virus or other contaminants
that may corrupt or destroy any data it processes or disable
any of its components;
(v) such Material is free of Bugs in design, materials and
workmanship; provided however that the warranting party and
such other party agree that, due to the nature of such
Material, the warranting party may be unable to detect, locate
and correct all Bugs; and
(vi) all time-and-date related aspects of Object Code will operate
beyond December 31, 1999 ("Millennium Date Change") at the same
level of functionality as would have otherwise existed in the
absence of a Millennium Date Change.
Except as expressly provided in this Section 5.1, anything provided by the
warranting party to the other party in relation to this Agreement is provided
"AS IS", without representation, warranty or covenant of any kind.
5.2 Disclaimers.
(a) EXCEPT AS EXPRESSLY PROVIDED TO THE CONTRARY ELSEWHERE IN THIS
AGREEMENT, UNDER THIS AGREEMENT, EACH PARTY HEREBY EXPRESSLY DISCLAIMS ANY AND
ALL WARRANTIES, IRRESPECTIVE OF WHETHER EXPRESS, IMPLIED, STATUTORY, ARISING BY
CUSTOM OR TRADE USAGE OR OTHERWISE, INCLUDING FOR EXAMPLE BUT NOT LIMITED TO
WARRANTIES OF NON-INFRINGEMENT (EXCEPT AS EXPRESSLY PROVIDED TO THE CONTRARY
ELSEWHERE IN THIS AGREEMENT) AND THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
(b) EXCEPT AS EXPRESSLY PROVIDED TO THE CONTRARY ELSEWHERE IN THIS
AGREEMENT, UNDER THIS AGREEMENT, EACH PARTY HEREBY EXPRESSLY DISCLAIMS ANY AND
ALL WARRANTIES (i) REGARDING THE OTHER PARTY'S OR A NON-PARTY'S MODIFICATION TO
A SERVICE OR MATERIAL OR (ii) THAT A SERVICE OR MATERIAL WILL MEET THE OTHER
PARTY'S REQUIREMENTS OR (iii) THAT A SERVICE OR MATERIAL WILL OPERATE IN THE
COMBINATIONS THAT MAY BE SELECTED BY SUCH OTHER PARTY OR (iv) THAT A SERVICE OR
MATERIAL WILL OPERATE UNINTERRUPTED OR ERROR FREE.
10
6.0 Limitation of Liability
6.1 Limitation of Liability. SUBJECT TO SECTIONS 6.4 AND 7.0 BUT
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY IN THIS AGREEMENT, NEITHER PARTY
SHALL BE LIABLE UNDER THIS AGREEMENT TO THE OTHER PARTY (NOR TO ANY PERSON OR
PERSONS WHOSE CLAIM OR CLAIMS ARE BASED ON OR DERIVED FROM A RIGHT OR RIGHTS
CLAIMED BY SUCH OTHER PARTY) FOR ANY SPECIAL, INDIRECT, INCIDENTAL,
CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES OF ANY KIND, INCLUDING FOR EXAMPLE
BUT NOT LIMITED TO LOST PROFITS, LOST SAVINGS, LOST REVENUES, OR LOSS OF
BUSINESS, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN ADDITION,
NEITHER PARTY SHALL BE LIABLE FOR ANY NON-PARTY CLAIM EXCEPT AS SET FORTH IN
SECTION 7.0 OF THIS AGREEMENT.
6.2 Force Majeure. Subject to Sections 6.4 and 7.0 but notwithstanding
anything to the contrary in this Agreement, neither party shall be liable under
this Agreement for (or deemed in default of this Agreement by reason of) any
failure, delay or interruption in performing any term or condition of this
Agreement due to cause(s) entirely beyond the control of such party, including,
without limiting the generality of the foregoing, strikes, boycotts, labor
disputes, embargoes, acts of God, acts of public enemy, acts of Governmental
Authority, natural disasters (e.g. fires, floods), riots, rebellion, shortages
of materials or supplies; subject however to the condition that such party gives
the other party written notice thereof promptly and, in any event, within
thirty-one (31) days of discovery thereof and uses its best efforts to cure such
cause. In the event of any such cause, the time for performance shall be
extended for a period equal to the duration of such cause.
6.3 Monetary Limitation. Subject to Sections 6.4 and 7.0 but
notwithstanding anything else to the contrary in this Agreement, IN NO EVENT
SHALL EITHER PARTY'S AGGREGATE LIABILITY TO THE OTHER PARTY (INCLUDING LIABILITY
TO ANY PERSON OR PERSONS WHOSE CLAIM OR CLAIMS ARE BASED ON OR DERIVED FROM A
RIGHT OR RIGHTS CLAIMED BY SUCH OTHER PARTY) UNDER THIS AGREEMENT (EXCEPT
SECTION 7.0) EXCEED THE HIGHER OF:
(a) ALL AMOUNTS PAID (COMPUTED AS OF THE DATE OF ANY FINAL JUDGMENT) BY
pcOrder TO Trilogy UNDER THIS AGREEMENT; or
(b) ALL AMOUNTS PAID (COMPUTED AS OF THE DATE OF ANY FINAL JUDGMENT) BY
Trilogy TO pcOrder UNDER THIS AGREEMENT.
6.4 Exception to Limitations. THE LIMITATIONS OF THIS SECTION 6.0 SHALL
NOT APPLY TO ANY BREACH BY A PARTY OF ITS OBLIGATIONS UNDER SCHEDULE C OF THIS
AGREEMENT.
7.0 Indemnification
Notwithstanding anything to the contrary in this Agreement (e.g. including
but not limited to Section 6.0), each party ("indemnifying party") hereby agrees
to and will defend, indemnify and hold harmless the other party (and its
directors, officers, shareholders, employees and agents) for any claim
(including but not limited to any liability, loss, claim, damage, cause of
action and injury) against such other party (or its directors, officers,
shareholders, employees and agents) by any non-party (other than such other
party's Affiliates) to the extent based on an actual or alleged:
(a) failure by the indemnifying party, to the extent not caused by such
other party (or its directors, officers, shareholders, employees and agents), to
perform any one or more of the indemnifying party's obligations under this
Agreement,
(b) breach of any one or more of the indemnifying party's representations
or warranties,
(c) failure by the indemnifying party to comply with government laws and
regulations,
11
(d) intentional or grossly negligent act or omission of the
indemnifying party or any one or more of its employees, agents or contractors,
or
(e) to the extent that the indemnifying party delivers Material to such
other party under Section 1.1, Section 1.2 or Section 2.0, (1) failure by the
indemnifying party to either own or have sufficient rights to deliver such
Material to such other party, (2) failure by the indemnifying party to either
own or have sufficient rights to grant the licenses as granted elsewhere in this
Agreement, (3) infringement (or violation) by such Material of a non-party's
Intellectual Property Right, or (4) failure of all time-and-date related aspects
of Object Code to operate beyond December 31, 1999 ("Millennium Date Change") at
the same level of functionality as would have otherwise existed in the absence
of a Millennium Date Change;
subject however to the condition that such other party:
(1) promptly provides effective written notice of any such
claim (e.g. the initial demand or the filing of a lawsuit, whichever is
earlier, by such non-party) to the indemnifying party,
(2) allows the indemnifying party to control the defense of
the claim and settlement negotiations, including but not limited to
selection of legal counsel, and
(3) fully cooperates with the indemnifying party in such
defense and settlement negotiations, including but not limited to
providing the indemnifying party with all available information,
assistance, authority, and cooperation to enable the indemnifying party
to defend and settle the claim.
In defending, indemnifying and holding harmless such other party, the
indemnifying party shall reimburse such other party for all costs and expenses,
including reasonable attorneys' fees, incurred by such other party in connection
with such claim.
Notwithstanding anything to the contrary in this Agreement: (a) neither
party shall have any obligation to defend, indemnify and hold harmless such
other party (or its directors, officers, shareholders, employees and agents) for
any claim against such other party (or its directors, officers, shareholders,
employees and agents) by any non-party based on such other party's or a
non-party's actual or alleged modification to a service or Material; and (b) if
a service or Material becomes or (in the indemnifying party's opinion) is likely
to become, the subject of any claim by any non-party, such other party shall
permit the indemnifying party (at the indemnifying party's sole option and
expense) to modify such service or Material in order to avoid such claim.
8.0 Miscellaneous
8.1 Independent Contractor Status. Each party is and shall remain at
all times an independent contractor, and nothing in this Agreement shall be
deemed to create a joint venture, partnership, employment, franchise,
master-servant, or agency relationship between the parties. Neither party has
the right of authority to assume or to create any obligation or responsibility
on behalf of the other.
8.2 Assignment. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of either party. Neither party may,
without the prior written consent of the other party, assign or transfer any
right (other than a right to receive payment) under or obligation incurred under
this Agreement. Such consent shall not be unreasonably withheld. Notwithstanding
anything to the contrary in this Agreement, either party may assign this
Agreement, without the other party's consent, only to any non-party that
succeeds by operation of law to, purchases, or otherwise acquires substantially
all of the assets of such assigning party and expressly assumes in writing such
assigning party's obligations under this Agreement; subject however to the
condition that such assigning party shall continue being subject to such
obligations under this Agreement notwithstanding such assignment.
12
8.3 Governing Law. Notwithstanding anything to the contrary in this
Agreement, this Agreement shall be deemed entered into in Texas and shall be
governed by and construed and interpreted in accordance with the laws of the
State of Texas that apply to contracts executed in and performed entirely within
the State of Texas, without reference to any rules of conflict of laws. With
respect to any suit, action or other proceeding arising from (or relating to the
relationship created by) this Agreement, the parties hereby agree to
non-exclusive personal jurisdiction and venue of the United States District
Court for the Western District of Texas (and any Texas State Court within Xxxxxx
County, Texas).
8.4 Legal Fees. If an action is brought to enforce any provision or
declare a breach of this Agreement, the non-prevailing litigant shall pay (to
the prevailing litigant, in addition to any other amounts awarded) the costs of
such action. Such costs shall include all reasonable fees of the action and all
reasonable costs incurred in obtaining any interim relief if such relief was
granted at the request of the prevailing litigant, all reasonable legal and
other related costs and expenses, including attorneys' fees, expert witness
fees, costs of appeal, and all other reasonable out-of-pocket expenses incurred
by the prevailing litigant in connection with such action.
8.5 Taxes. The requesting party (and the Receiving Party, as
applicable), as such term is used elsewhere in this Agreement, represents and
warrants that it shall directly pay Governmental Authorities all taxes (e.g.
sales and use taxes) where applicable, and any other governmental charges
levied, imposed or assessed on licenses, services and Material supplied to such
party under this Agreement, excluding however ordinary personal property taxes
assessed against or payable by the other party, taxes based upon the other
party's net income and the other party's corporate franchise taxes.
8.6 Notice. Any notice under this Agreement shall be (a) in writing,
(b) addressed to a party's Contact Person at the address set forth below (or as
expressly designated by such party in a subsequent effective written notice
referring specifically to this Agreement), (c) sent in a manner requiring a
signed receipt, such as courier delivery, Federal Express delivery, or
registered (or certified) mail, return receipt requested, and (d) deemed
effective upon receipt.
If to pcOrder:
xxXxxxx.xxx, Inc.
5000 Plaza on the Lake, Xxxxx 000
Xxxxxx, XX 00000
If to Trilogy:
Trilogy Software, Inc.
0000 Xxxx Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
8.7 Enforceability. If a portion of this Agreement is determined to be
or becomes unenforceable or illegal, then such portion shall be reformed or
eliminated to the extent necessary for this Agreement to be enforceable and
legal, and the remainder of this Agreement shall remain in effect in accordance
with its provisions as modified by such reformation or elimination.
8.8 Waiver. No breach or provision of this Agreement shall be deemed
waived or excused, unless such waiver or excuse is in writing and signed by an
authorized agent of the waiving or excusing party. The failure by (or delay of)
either party in enforcing (or exercising) any of its rights under this Agreement
shall: (a) not be deemed a waiver or excuse of such right or of any breach of
the same or different provision of this Agreement, and (b) not prevent a
subsequent enforcement (or exercise) of such right.
8.9 Headings. Titles and headings of paragraphs and sections within
this Agreement are provided merely for convenience and shall not be used or
relied upon in construing this Agreement or the parties' intentions with respect
thereto.
13
8.10 Counterparts This Agreement may be signed in multiple
counterparts, provided however that each party shall receive a counterpart fully
signed by the other party.
8.11 Bankruptcy. If either party suffers an insolvency, and either a
debtor-in-possession or the trustee in a case under the Bankruptcy Code rejects
this Agreement as permitted in the Bankruptcy Code, then the other party may
elect to retain its rights (including all licenses) under this Agreement to the
maximum extent provided in Section 365(n) of the Bankruptcy Code.
8.12 Mutual Negotiations. Each provision of this Agreement shall be
fairly interpreted and construed in accordance with its provisions and without
any strict interpretation or construction in favor of or against either party.
8.13 Expenses. Except as expressly provided to the contrary elsewhere
in this Agreement (e.g. including but not limited to Section 2.0), each party
shall bear all of its own costs and expenses arising from its obligations and
activities under this Agreement, including but not limited to costs and expenses
for Intellectual Property Rights, facilities, work spaces, utilities,
management, employees, supplies and travel.
8.14 Full Agreement. This Agreement, including its Schedules,
constitutes the sole and exclusive terms and conditions between the parties
relating to the subject matter hereof and supersedes all prior discussions,
writings, negotiations, understandings and agreements with respect thereto,
including the June 1, 1996 Reseller Agreement (which is hereby terminated as of
June 1, 1996 in its entirety, notwithstanding anything to the contrary therein)
and the June 1, 1996 Master License Agreement (which is hereby terminated as of
June 1, 1996 in its entirety, notwithstanding anything to the contrary therein),
and (subject to Section 8.7) shall not be amended except by a written amendment
that is completely executed by authorized agents of both parties. Each party
hereby acknowledges its full receipt and satisfaction of all payments scheduled
to be paid (by the other party) on or before the Effective Date, including for
example but not limited to Trilogy's full receipt and satisfaction of (a) a
payment by pcOrder on or about June 1, 1996 of [*] retroactive to July, 1993 and
(b) royalty payments scheduled to be paid (by pcOrder) on or before the
Effective Date. Such payments were partial consideration in exchange for former
obligations. Accordingly, no such payment shall be refunded, and no such payment
shall satisfy or reduce any payment owed by a party to the other party under
this Agreement. By signing below, each of the parties acknowledges that it has
read, understands and agrees to this Agreement as being effective for all
purposes as of the Effective Date, notwithstanding any later date set forth
below.
pcOrder Trilogy
By: /s/ Xxxxxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxxx
__________________________________ ____________________________________
(authorized signature) (authorized signature)
Name: Xxxxxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxxxxx
Title: President Title: President & Chief Executive
Officer
Date: ____________________________ Date: _____________________________
14
Schedule A
Definitions
-----------
"Affiliates" shall mean any entity that is required by generally
accepted accounting principles to be consolidated with a party for financial
reporting purposes.
"Bugs" shall mean defects, problems, logical errors, and bugs.
"Computer E-Commerce Product" shall mean any network based electronic
commerce product for enabling sales, purchasing, marketing, or distribution
within the computer products market, including but not limited to the markets
for personal computers, servers, workstations, related software, related storage
devices, related peripherals, and related data communications equipment.
"Confidential Information" shall mean any trade secret or confidential
Material of a party ("Disclosing Party") disclosed or delivered (e.g. including
but not limited to giving access to Material, such as may be contained in a
database) by the Disclosing Party to the other party ("Receiving Party");
provided however that to be deemed Confidential Information, the Material (a) if
in tangible (e.g. including but not limited to electronic) form, must be
prominently designated by the Disclosing Party as being either "proprietary,"
"confidential," "trade secret," or words of similar importance, in writing
provided to the Receiving Party at the time when the Material is initially
disclosed or delivered to the Receiving Party, whichever is earlier, or (b) if
disclosed orally to the Receiving Party, must be identified by the Disclosing
Party to the Receiving Party as being either proprietary, confidential, or trade
secret Material at the time of such disclosure, subject however to the condition
that the Disclosing Party provides to the Receiving Party a written summary of
such orally disclosed Material no later than thirty-one (31) days after such
disclosure. Notwithstanding the immediately preceding sentence, Confidential
Information shall include Source Code, irrespective of whether so designated as
being "proprietary," "confidential," "trade secret," or words of similar
importance, and Confidential Information shall not include:
(a) any Material that is publicly known or available, or becomes
publicly known or available, without the Receiving Party breaching this
Agreement;
(b) any Material that has been publicly disclosed by the Disclosing
Party or is delivered by the Disclosing Party to a non-party without an
obligation of confidence;
(c) any Material already (i.e., prior to receipt by the Receiving
Party) rightfully in the possession of the Receiving Party (or any one or more
of its Affiliates other than the Disclosing Party) without an obligation of
confidence;
(d) any Material that is rightfully received by the Receiving Party (or
any one or more of its Affiliates other than the Disclosing Party) from a
non-party without an obligation of confidence; or
(e) any Material that is independently developed by Receiving Party (or
any one or more of its Affiliates other than the Disclosing Party) without using
Confidential Information of the Disclosing Party.
"Data Maintenance" shall mean updates to, changes to, new releases of,
and other maintenance of data, databases, or any other compilation of data.
"Escrow Agent" shall mean (a) Data Securities International, Inc.
("DSI"), a Delaware Corporation, and (b) any other non-party to the extent
mutually agreed upon by the parties.
"Governmental Authority" shall mean any domestic or foreign
governmental: court, administrative agency, commission, board, bureau, agency,
tribunal, instrumentality, authority, department, or political subdivision.
15
"Intellectual Property Rights" shall mean any patent, trade secret,
confidential Material, know-how, show-how, maskwork right, copyright (e.g.
including but not limited to any Moral Right), and any other intellectual
property protection and intangible legal rights and interests, of any one or
more countries, including for example but not limited to (a) any Person's
publicity or privacy right, (b) any utility model or application therefor, (c)
any industrial model or application therefor, (d) any certificate of invention
or application therefor, (e) any application for patent, including for example
but not limited to any provisional, divisional, reissue, reexamination or
continuation application, (f) any substitute, renewal or extension of any such
application, and (g) any right of priority resulting from the filing of any such
application.
"Material" shall mean: (a) any work of authorship, idea, procedure,
process, system, method, concept, principle, discovery, invention, art, machine,
manufacture, composition of matter, material, improvement, formula, pattern,
device, compilation, information, list, article, code, matter, program,
technique, apparatus, algorithm, design, circuitry, hardware, firmware,
software, product or data, irrespective of whether patentable or copyrighted,
and (b) any portion, copy and extract of such Material, in tangible or
intangible form, in any media.
"Moral Rights" shall mean (a) any right of paternity or integrity, (b)
any right to claim authorship or require authorship identification, (c) any
right to object to distortion, mutilation or other modification of, or other
derogatory action in relation to, a work of authorship, and (d) any similar
right existing under judicial or statutory law of any country or under any
treaty, irrespective of whether such right is generally referred to as a "moral
right".
"Object Code" shall mean computer software code, in electronic form,
that (a) is executable by a computer system without further processing by a
software compiler, assembler or interpreter and (b) results when Source Code is
processed by a software compiler, assembler or interpreter.
"pcOrder Activities" shall mean (a) to use, make, reproduce, prepare
derivative works based upon, license, offer to license, import, export, publish,
distribute, perform, display, advertise, market, promote, service and/or support
any one or more pcOrder Products in Object Code form (and, with regard to data,
database form) only, and/or to offer to do so, and/or to sublicense any one or
more non-parties to do so, and/or (b) to deposit any one or more pcOrder
Products in Source Code form with an Escrow Agent, exercising the same care and
discretion (but not less than commercially reasonable care and discretion
according to the value of such Source Code) to prevent and restrain any release
of such Source Code to another non-party as pcOrder employs with respect to its
own Source Code of similar importance that it does not wish to have released.
"pcOrder Contact Person" shall mean pcOrder's Chief Financial Officer
or any other individual designated by pcOrder in an effective written notice to
Trilogy.
"pcOrder Product" shall mean:
(a) any product identified in Schedule E, in the forms (and versions)
thereof existing on or before the Effective Date;
(b) any other product of pcOrder (or any one or more of its
Affiliates), but only to the extent that such product is a Computer E-Commerce
Product; and
(c) any other product of pcOrder but only to the extent approved in
writing by Trilogy on a case-by-case basis for a particular customer receiving a
particular product.
"Person" shall mean any individual, firm, corporation, partnership,
group, trust, joint venture, limited liability company or partnership,
Governmental Authority or other entity.
"Pre-Trigger Products" shall mean all products that are generally
available, before a Trigger Event, from Trilogy (or any one or more of its
Affiliates other than pcOrder) to its or their general customer base.
16
"Source Code" shall mean computer software code, in electronic form,
that is (a) executable by a computer system only with further processing by a
software compiler, assembler or interpreter, and (b) suitable and sufficient to
permit a reasonably skilled software engineer to develop, install, implement,
regenerate, modify, enhance, adapt, change, translate, maintain and support
computer software, and to prepare derivative works based thereupon.
"Trigger Event" shall mean (a) a Trilogy Change of Control or (b) an
event in which pcOrder ceases being an Affiliate of Trilogy.
"Trilogy Activities" shall mean (a) to use, make, reproduce, prepare
derivative works based upon, license, offer to license, import, export, publish,
distribute, perform, display, advertise, market, promote, service and/or support
any one or more Trilogy Products in Object Code form (and, with regard to data,
database form) only, and/or to offer to do so, and/or to sublicense any one or
more non-parties to do so, and/or (b) to deposit any one or more Trilogy
Products in Source Code form with an Escrow Agent, exercising the same care and
discretion (but not less than commercially reasonable care and discretion
according to the value of such Source Code) to prevent and restrain any release
of such Source Code to another non-party as Trilogy employs with respect to its
own Source Code of similar importance that it does not wish to have released.
"Trilogy Change of Control" shall mean only a merger, consolidation,
acquisition or similar business combination, irrespective of whether Trilogy is
the surviving or ultimate entity, in which more than fifty percent (50%) of the
issued and outstanding voting power of Trilogy becomes controlled, directly or
indirectly through proxy or through one or more subsidiaries, by a non-party who
did not have such control before the Effective Date.
"Trilogy Contact Person" shall mean Trilogy's Chief Financial Officer
or any other individual designated by Trilogy in an effective written notice to
pcOrder.
"Trilogy Product" shall mean:
(a) any product identified in Schedule D, in the forms (and versions)
thereof existing on or before the Effective Date;
(b) before a Trigger Event, and after expiration of the first
five (5) years immediately following a Trigger Event (but in
no event shall such expiration occur before September 1, 2008
after a Trigger Event), any other product of Trilogy (or any
one or more of its Affiliates); and
(c) during the first five (5) years immediately following a
Trigger Event (but in any event at least until September 1,
2008 following a Trigger Event), any other product of Trilogy
(or any one or more of its Affiliates), but only to the extent
that such product is: (i) not a Computer E-Commerce Product,
or (ii) a Computer E-Commerce Product without any portion of
the Material identified in Category B-2 of Schedule E (and
updates to, changes to, and new releases of such Material to
the extent owned by pcOrder), or (iii) approved in writing by
pcOrder on a case-by-case basis for a particular customer
receiving a particular product.
17
Schedule B
Joint Inventions
----------------
"Joint Inventions" shall mean any and all discoveries or inventions
qualifying for patent protection under 35 U.S.C. Section 101 if at least one
employee and/or contractor of pcOrder and at least one employee and/or
contractor of Trilogy are properly named inventors pursuant to 35 U.S.C. ss.
116.
"Joint Copyrights" shall mean any and all original works of authorship
qualifying for copyright protection under 17 U.S.C. ss. 102 if created by at
least one employee and/or contractor of pcOrder and at least one employee and/or
contractor of Trilogy.
"Joint Intellectual Property" shall mean any and all Joint Inventions,
Joint Copyrights, and other Intellectual Property Rights if created, invented or
discovered by at least one employee and/or contractor of pcOrder and at least
one employee and/or contractor of Trilogy.
B.1 Ownership. Subject to any right of any non-party, and subject to
each party's sole ownership of its Intellectual Property Rights which dominate
Joint Intellectual Property, any and all Joint Intellectual Property shall be
owned jointly in equal and undivided interests by the parties in their joint
names. Each party shall (a) execute any and all documents necessary to
effectuate such equal and undivided interests of the parties in Joint
Intellectual Property; and (b) treat Joint Intellectual Property for all
purposes (e.g. including but not limited to Section 3.0) of this Agreement in
the same manner as such party treats the other party's solely-owned Material
delivered under this Agreement (and Intellectual Property Rights that may cover
(or be available in, or result from, or be granted pursuant to) such Material).
B.2 Cooperation. The parties shall reasonably consult with one another
in deciding whether (and to what extent) to enforce or defend Joint Intellectual
Property. Each party ("Cooperating Party") shall (at the request of the other
party, or any of its successors, assigns, nominees, representatives and
designees) cooperate and do everything that such other party (or any one or more
of its successors, assigns, nominees, representatives and designees) may
reasonably consider necessary or appropriate to assist such other party (and its
successors, assigns, nominees, representatives and designees) to prepare and
make filings in any and all countries to apply for, prosecute, register,
evidence, defend, obtain, hold, secure, vest title to, protect, perfect,
maintain, uphold and enforce any and all Joint Intellectual Property.
Such cooperation includes for example but is not limited to: (a)
communicating to such other party (and its successors, assigns, nominees,
representatives and designees) any Material relating to conception or reduction
to practice or prosecution of any or all Joint Intellectual Property; (b)
testifying and rendering prompt assistance and cooperation in any and all legal
proceedings (e.g. including but not limited to any opposition, cancellation
proceeding, interference proceeding, priority contest, public use proceeding,
reexamination proceeding, and court proceeding) involving any or all Joint
Intellectual Property; and (c) executing (or causing to be executed) any and all
assignments, oaths, declarations, powers of attorney, and other instruments and
documents.
B.3 Power of Attorney. If the Cooperating Party fails or refuses to
execute any such assignment, oath, declaration, power of attorney, instrument or
document, the Cooperating Party hereby appoints such other party (and its
successors and assigns) as the Cooperating Party's true and lawful
attorney-in-fact (such power of attorney being irrevocable by the Cooperating
Party and coupled with an interest in favor of such other party and its
successors and assigns), with full power of substitution, to execute such
assignments, oaths, declarations, powers of attorney, and other instruments and
documents in the name and stead of the Cooperating Party but on behalf of and
for the benefit of such other party and its successors and assigns, irrespective
of whether in the name of the Cooperating Party or such other party or
otherwise.
18
B.4 Expenses. All expenses associated with Joint Intellectual Property,
including for example but not limited to the expenses of preparing and making
filings as described further hereinabove, shall be equally shared between the
parties. Notwithstanding the foregoing, either party may elect not to equally
share in all or a portion of such expenses with the other party, in which case
the other party shall have the right (but no responsibility or obligation) to
prepare and make such filings and shall have full control over such non-shared
portion of such filings, even though title to any and all Joint Intellectual
Property shall be jointly owned by the parties in their joint names.
19
Schedule C
Confidentiality
---------------
C.1 Order of Precedence. Disclosure, delivery and treatment of
Confidential Information between the parties shall be governed under this
Schedule C of this Agreement.
C.2 Confidentiality of Agreement. Notwithstanding anything to the
contrary in this Agreement, each party shall treat the provisions of this
Agreement (including but not limited to any and all addenda, schedules, exhibits
and amendments thereof) as being the other party's Confidential Information;
provided however that each party unilaterally may publicly disclose to
non-parties the existence of its relationship with the other party.
C.3 Authorized Disclosure. Subject to Section C.4, a party ("Receiving
Party") that receives (before or during the term of this Agreement) Confidential
Information of the other party ("Disclosing Party") is hereby authorized to
disclose and/or deliver such Confidential Information to:
(a) any one or more employees of the Receiving Party (or any one
or more of its Affiliates) having a need to know for the
purposes of this Agreement or for the performance of licensed
activities under this Agreement,
(b) any one or more non-parties having a need to know for the
performance of licensed activities under this Agreement, but
only on behalf of and for the sole benefit of the Receiving
Party and/or the Disclosing Party and/or any one or more
Affiliates thereof, and
(c) any one or more other non-parties after the Receiving Party
obtains prior written consent of an authorized agent of the
Disclosing Party with respect to such non-party;
provided however that: before disclosure or delivery of the Disclosing Party's
Confidential Information to any non-party, the Receiving Party shall have in
place with such non-party an agreement sufficient to require that such non-party
treat such Confidential Information in accordance with the Receiving Party's
obligations under this Agreement.
C.4 Obligations and Rights.
(a) Care and Discretion. The Receiving Party hereby agrees that, for a
period of ten (10) years after the Receiving Party receives the Disclosing
Party's Confidential Information, the Receiving Party shall exercise the same
care and discretion (but not less than commercially reasonable care and
discretion according to the value of such Confidential Information) to prevent
and restrain any unauthorized use, disclosure, delivery, publication,
dissemination, accessibility or reproduction of such Confidential Information
(irrespective of its media or whether in tangible or intangible form) as the
Receiving Party employs with respect to its own Material of similar importance
that it does not wish to have used, disclosed, delivered, published,
disseminated, accessed or reproduced.
(b) Authorized Use. Within the scope of and subject to licenses granted
elsewhere in this Agreement, the Receiving Party may use the Disclosing Party's
Confidential Information for any purpose that does not violate the Receiving
Party's obligations under the immediately preceding paragraph, but the Receiving
Party shall prevent and restrain its other use of such Confidential Information
without prior written consent of an authorized agent of the Disclosing Party.
20
(c) Return of Confidential Information. In response to written request
by the Disclosing Party, the Receiving Party shall return to the Disclosing
Party (or certify to the Disclosing Party that the Receiving Party has
destroyed) all tangible forms of such Confidential Information, except
Confidential Information accessed by the Receiving Party under Section 1.1 or
Section 1.2; provided however that (i) the Receiving Party may retain one
archival copy of such Confidential Information to be used only for the purposes
set forth in Section C.6 of this Agreement and (ii) this Section C.4(c) shall
not be applied to require the return (to the Disclosing Party) or destruction of
any Confidential Information already (i.e. before the Receiving Party receives
such written request) licensed to the Receiving Party under Section 1.3 of this
Agreement.
(d) Ownership. As between the parties, the Disclosing Party shall
solely own the Disclosing Party's Confidential Information, notwithstanding
disclosure or delivery to the Receiving Party of such Confidential Information.
(e) No Obligation to Disclose. Except as expressly provided to the
contrary elsewhere in this Agreement, this Agreement does not require either
party to disclose, deliver or receive Material.
C.5 Inadvertent Unauthorized Disclosure. If the Receiving Party is
responsible for any inadvertent unauthorized activity in relation to the
Disclosing Party's Confidential Information (e.g. including but not limited to
inadvertent unauthorized use, disclosure, delivery, publication, dissemination,
accessibility or reproduction), then the Receiving Party shall immediately
notify the Disclosing Party in writing and use its best efforts to prevent any
further unauthorized activity and to mitigate the consequences of such
inadvertent unauthorized activity.
C.6 Permitted Disclosure. Notwithstanding anything to the contrary in
this Agreement, disclosure by the Receiving Party of the Disclosing Party's
Confidential Information shall be permitted if such disclosure is:
(a) in response to a request or order of a Governmental Authority;
provided however that the Receiving Party shall first have notified the
Disclosing Party in writing of such request or order, and the Disclosing Party
(at its option) shall have had thirty-one (31) days (or shorter time if required
by such request or order) to obtain a protective order, and the Receiving Party
shall limit its disclosure to only such Confidential Information that is
required to be disclosed by such request or order;
(b) otherwise required by law;
(c) necessary to establish the Receiving Party's rights under this
Agreement; or
(d) pursuant to the prior written consent of an authorized agent of the
Disclosing Party.
C.7 Injunctive Relief. In the event of a breach or threatened breach by
the Receiving Party of any provision of this Schedule C, then the Receiving
Party hereby acknowledges and agrees that the Disclosing Party (a) will suffer
immediate irreparable harm and significant injury and loss which would be
difficult to ascertain and which would not be fully compensable by damages alone
and (b) shall have the right to seek immediate temporary or permanent injunctive
relief, specific performance or other equitable relief, without prejudice to any
other rights and remedies available to the Disclosing Party under this
Agreement.
C.8 Reassignment of Employees. Nothing in this Agreement creates any
obligation in any way limiting or restricting assignment and/or reassignment of
employees within or between either party's departments, divisions and
Affiliates.
21
Schedule D
Trilogy
-------
SalesBUILDER
Applications:
3D
Attribute Selection Engine (ASE)
Checker
Client Server
Connections Model Pack
Database Bridge
Enterprise Manager
EWC Model Pack
Instaload
Model Bundler
Needs Analysis Model Pack
OrderBUILDER
PriceBUILDER
QuoteBUILDER
Sales BUILDER Engine
SalesBUILDER EWC Interface
SalesBUILDER for Windows
SBW/QB
Selection Sets
Shared Memory
System Specification Language
Upgrades Model Pack
Tools:
ASE Maint
CodeWrite Model Extension
ComponentEDITOR
Engine Macro API
FormBUILDER ModelDebugger (MDE) PCM Manager API SalesBUILDER
Engine API Kit SalesBUILDER Translator Selection Set API Kit
Models:
Trilogy Computer Industry Model
Languages:
Configuration Modeling Language
22
Selling Chain
Applications:
SC Backbone
SC Catalog
SC Commission
SC Commission Dashboard
SC Config
SC Config PowerPak
SC Contract Manager
SC DiagramServer
SC Explorer
SC FormServer
SC Portfolio
SC Pricebook
SC Pricer
SC Pricer (Engine)
SC Process Manager
SC Promotion Manager
SC Proposal
SC Quote
SC Rating Manager
SC Replicator Engine
SC Report
SC Web Application Server
SC Web Backbone
SC Workspace
Tools:
SC Backbone SDK
SC Catalog Manager
SC Commission Manager
SC Config Manager
SC Config PowerPak Manager
SC Object Studio
SC Pricer Manager
SC Report Toolkit
Trilogy Architecture Products
Applications:
Trilogy Backbone COM
Trilogy Backbone Java
Trilogy FFC-Com
Trilogy FFC-Html
Trilogy FFC-Java
Trilogy Object Manager
Trilogy Replicator
Trilogy Report
Trilogy Workspace
Tools:
Trilogy Backbone SDK
Trilogy Replicator Manager
Trilogy Report Manager
23
ERP Integration Products
Applications:
Trilogy Checker Server for SAP
Trilogy Order Entry for Oracle Applications
Trilogy Order Entry for SAP
Trilogy Pricer Bridge
Trilogy Pricer Bridge for Oracle Applications
Trilogy Pricer Bridge for SAP
IBM Java Products
Applications:
Catalog
Customer Browser
Lotus Notes Backbone
Proposal
Quote
Channel Chain
24
Schedule E
pcOrder
-------
Category A
----------
pcOrder Online Client (TechBuyer)
pcOrder Online Client Class/Category/Vendor Search
pcOrder Online Client Keyword Product Search
pcOrder Online Client SKU Based Product Lookup
pcOrder Online Client Attribute Based Search
pcOrder Online Client Quoter
pcOrder Online Client Needs Analysis Wizard
pcOrder Online Client Search and Replace
pcOrder Online Client Configuration Checker
pcOrder Online Client Pricing Profile Maintenance
pcOrder Online Client Pricing and Availability Alerts
pcOrder Online Client Lease Pricing Module
pcOrder Online Client Credit Application Maintenance
pcOrder Online Client Datasheets
pcOrder Online Client Product Comparison
pcOrder Web Storefront
pcOrder Web Storefront Quote
pcOrder Web Storefront Build Wizard
pcOrder Web Storefront Search and Replace
pcOrder Web Storefront Configuration Checker
pcOrder Web Storefront Class/Category/Vendor Search
pcOrder Web Storefront Keyword Product Search
pcOrder Web Storefront SKU Based Product Lookup
pcOrder Web Storefront Standards Management
pcOrder Web Storefront Catalog Subsetting
pcOrder Web Storefront Cross Sell/Upsell
pcOrderAPI Client Communication Module
25
pcOrder Application Server Suite
pcOrder Application Server Class/Category/Vendor Search
pcOrder Application Server Keyword Product Search
pcOrder Application Server SKU Based Product Lookup
pcOrder Application Server Attribute Based Search
pcOrder Application Server Pricing
pcOrder Application Server Needs Analysis (Configuration)
pcOrder Application Server Search and Replace
pcOrder Application Server Configuration Checker
pcOrder Application Server Pricing Profiles
pcOrder Application Server Pricing and Availability Alerts
pcOrder Application Server Lease Pricing Module
pcOrder Application Server Datasheets
pcOrder Application Server Product Comparison
pcOrder Application Server Catalog Subsetting
pcOrder Application Server Cross Sell/ Upsell
pcOrder Application Server Enterprise Manager
pcOrder Application Server Client/Server
pcOrder Application Server Little Sister Process Monitor
pcOrder Application Server Model Update Process (MUP)
pcOrder Application Server Model Control Process (MCP)
pcOrder Models
pcOrder Computer Industry Model
pcOrder IBM AAP Model
pcOrder Compaq CTO Model
pcOrder Customer Desktop
CommerceStation Suite
CommerceStation Catalog
CommerceStation Quote
CommerceStation Referral
CommerceStation Locator
CommerceStation Order
CommerceStation Config
CommerceStation Price
CommerceStation SAP Bridge
CommerceStation User Maintenance
CommerceStation Partner Maintenance
CommerceStation Catalog Maintenance
CommerceStation Price Maintenance
26
Category B-1
------------
pcOrder Online Client Customer Profiles
pcOrder Online Client Lease Documentation Maintenance
pcOrder Application Server Monitoring and Control Suite
pcOrder Alert Monitor
pcOrder Keyword Search Data Update Process
pcOrder Server Registry Monitor
` pcOrder Server Registry Propagator
pcOrder Server Event Notification Module
ChannelTrack Market Analysis Tool
pcOrder Realtime Pricing Modules
Techdata
Xxxxxx Micro
MicroAge
GE
pcOrder User Administration Tool
pcOrder Catalog Subsetting Tool
pcOrder Web Storefront Setup Tool
pcOrder Leasing Maintenance Tool Suite
pcOrder Leasing Reseller Defaults Maintenance
pcOrder Leasing Residual Maintenance
pcOrder Leasing Tier Maintenance
pcOrder Leasing Yield Maintenance
pcOrder Leasing Usury Limit Maintenance
pcOrder Consulting Products
pcOrder Kingston Memory Advisor
pcOrder MCI Tax and Freight Module
pcOrder MCI PO Server
pcOrder MCI Customer Search Module
pcOrder MCI Order Entry Module
pcOrder Avnet Order Entry Module
pcOrder Web StoreFront Template Set
pcOrder Customizable Template Set
pcOrder HP ESPP Template Set
pcOrder Customer Search Tool Template Set
pcOrder Web Storefront Template Parser/HTML generator
27
Category B-2
------------
VIPER (Valued Information Partner Entry Resource)
VIPER Metadata Maintenance Tool
pcOrder Data Capture
pcOrder Data Model Test Suite
Test Case Database
Test Case Generation Tools
Test Track
pcOrder Workflow Management Tools
SKU Tracker
Catulator
pcOrder Pricebook Import Process Suite
Xxxxxx'x Lawyer
Pricebook Specific Import Scripts
pcOrder product content database
28
Schedule F
Source Code Escrow
------------------
"Deposited Code" shall mean:
(a) reasonably commented Source Code (but only to the extent owned
by or sufficiently licensed to Licensor) of Material that
Licensor has delivered to Licensee under Section 1.1, Section
1.2 or Section 2.0; and
(b) non-commercially available documentation (in hardcopy and, if
available, electronic form) suitable and sufficient to permit
a reasonably skilled software programmer without undue burden
to create, install, test, maintain, support, reproduce and use
such Material and to prepare derivative works based thereupon.
"Release Event" shall be deemed to occur only if Licensor (as defined
in Section 1.4):
(a) becomes insolvent;
(b) makes a general assignment for the benefit of creditors;
(c) is adjudicated bankrupt;
(d) admits in writing its insolvency or inability to pay its debts or
perform its obligations in the ordinary course of business as they mature;
(e) becomes the subject of any voluntary or involuntary proceeding in
bankruptcy, liquidation, dissolution, receivership, attachment or composition or
general assignment for the benefit of creditors, provided however that such
involuntary proceeding was not dismissed within sixty-two (62) days after it was
instituted; or
(f) breaches its obligation under Schedule G to use commercially
reasonable efforts toward supplying a correction in response to a Severity 1 Bug
or a Severity 2 Bug, provided however that Licensee provides Licensor with a
written notice that describes such breach and such breach is not cured within
thirty-one (31) days after Licensor receives such written notice.
F.1 Deposit. In response to a written request by Licensee (as defined
in Section 1.4), and at Licensee's expense: Licensor, Licensee and the Escrow
Agent will enter into a written escrow agreement (the "Escrow Agreement") to be
negotiated by the parties in good faith and pursuant to which Licensor will
deposit the Deposited Code in escrow with the Escrow Agent.
F.2 Release. The Escrow Agreement would instruct the Escrow Agent to
make the Deposited Code available to Licensee only upon occurrence of a Release
Event. Also, the Escrow Agreement would instruct the Escrow Agent to notify
Licensor in writing before delivering the Deposited Code to Licensee. Moreover,
the Escrow Agreement would provide that delivery of the Deposited Code to
Licensee would be subject to the following terms and conditions:
(a) Licensee would have no right to sublicense the Deposited Code;
(b) Licensee would keep the Deposited Code at a single location at
Licensee's corporate headquarters and would have rights to
only one copy of the Deposited Code, plus a backup copy to be
permanently stored as required below;
29
(c) Licensee would keep the Deposited Code in a highly restricted
access area with access thereto limited to designated Licensee
employees who have a need to access the Deposited Code for the
purposes permitted under this Schedule, for the duration of
time as necessary to achieve such purposes;
(d) Licensee would (i) advise, in writing, all designated Licensee
employees with access to the Deposited Code of the trade
secret and confidential nature of the Deposited Code and
Licensor's proprietary interest therein, and (ii) ensure that
all such designated Licensee employees have previously agreed
to the provisions of this Schedule and have a then currently
effective employment agreement with Licensee providing
equivalent protection to Licensor;
(e) Licensee would immediately return the Deposited Code,
including any and all copies thereof, to Licensor when
Licensee no longer requires the Deposited Code for the
purposes permitted under this Schedule; and
(f) Licensee's rights to the Deposited Code would include the
right to prepare derivative works based upon the Deposited
Code, but such rights would be strictly and solely for the
purpose of maintaining and supporting the Material that
Licensor has delivered to Licensee under Section 1.1, Section
1.2 or Section 2.0, and such rights would be only in
connection with Licensee's exercise of its then existing (i.e.
existing immediately prior to occurrence of the Release Event)
contractual rights under this Agreement or under a separate
agreement between Licensor and Licensee.
30
Schedule G
Maintenance Services
--------------------
To the extent that Licensor (as defined in Section 1.4) delivers
Material to Licensee (as defined in Section 1.4) under Section 1.1, Section 1.2
or Section 2.0, and subject to the condition that Licensee completely pays
amounts owed to Licensor under Sections 2.0 and 3.0, Licensor shall provide
Maintenance Services to Licensee for such Material in Object Code form, for as
long as Licensor makes Maintenance Services for such Material available to its
general customer base; provided however that (notwithstanding anything to the
contrary in the foregoing), for any given version of such Material, such
obligation shall automatically expire nine (9) months after general availability
of a more recent version thereof from Licensor to its general customer base.
"Maintenance Services" shall mean the following services.
(a) Licensor shall provide 24-hour pager availability for Severity 1
Bugs (as defined below).
(b) Licensor's support specialist shall return Licensee's calls
within the time specified below. Such response times shall be
measured from the time a Licensee contact person requests
support by one of the means set forth below.
(i) Severity 1 Bug
A Severity 1 Bug prevents useful work from being accomplished
or severely impacts Licensee's business as determined by
Licensee Designees. "Designees" shall mean two vice presidents
or other designees if vice presidents are unavailable, whose
names and positions will be provided to Licensor, who are
solely responsible for reporting Severity 1 Bugs to Licensor.
In response to a Severity 1 Bug, Licensor shall assign (within
two (2) hours after Licensor's receipt of the error report) at
least one fully qualified individual to address the Bug and
shall use commercially reasonable efforts toward supplying a
correction, given that time is of the essence for such
Material to operate substantially in accordance with its
specifications within one (1) calendar day after Licensor's
receipt of the error report. Such individual(s) shall work at
the affected location without interruption (i.e., twenty-four
(24) hours per day) at no additional cost to Licensee until
Licensor provides such correction, provided that Licensee
personnel are likewise available at the affected location
without interruption.
(ii) Severity 2 Bug
A Severity 2 Bug substantially impairs Licensee's
ability to use one or more critical functions of such
Material. Licensee shall designate at its discretion
whether a Bug is a Severity 2 Bug but, if Licensor
disagrees upon review, the escalation path set forth
below is activated to resolve a dispute. Until such
dispute is resolved, Licensor will respond to the Bug
as a Severity 2 Bug.
In response to a Severity 2 Bug, Licensor shall use
commercially reasonable efforts toward supplying a
correction, given that time is of the essence for
such Material to operate substantially in accordance
with its specifications within two (2) calendar days
after Licensor's receipt of the error report.
Licensor shall assign fully-qualified technicians to
work at the affected location during Licensee's
regular business hours at no additional cost to
Licensee until Licensor provides such correction.
31
(iii) Severity 3 Bug
A Severity 3 Bug minimally impairs Licensee's ability
to use the critical functions of such Material.
Licensee shall designate at its discretion whether a
Bug is a Severity 3 Bug but, if Licensor disagrees
upon review, the escalation path set forth below is
activated to resolve a dispute.
In response to a Severity 3 Bug, Licensor shall use
commercially reasonable efforts toward supplying a
correction, given that time is of the essence for
such Material to operate substantially in accordance
with its specifications as soon as reasonably
possible within ten (10) calendar days after
Licensor's receipt of the error report.
(iv) Severity 4 Bug
All other Bugs are Severity 4 Bugs.
In response to a Severity 4 Bug, Licensor shall use
commercially reasonable efforts toward supplying a
correction, given that time is of the essence for
such Material to operate substantially in accordance
with its specifications in the next Minor Release of
such Material.
"Minor Release" means a release containing changes
that correct Bugs or that make minor improvements in
the functionality of such Material which are
generally made available by Licensor to its general
customer base. Typically, Minor Releases are
identified by the second number to the right of the
decimal in the numerical designation of the release.
(v) Dispute regarding severity
If a dispute between Licensee and Licensor regarding
the classification of a Bug is not resolved within 24
hours after Licensor's receipt of the error report,
then such dispute shall be referred to each party's
Director-level management for resolution. If such
Directors cannot resolve the dispute within 24 hours
the referral of the dispute to them, then such
Directors shall escalate the dispute to each party's
respective Vice President having applicable
responsibility. If such Vice Presidents cannot
resolve the dispute within 24 hours after referral of
the dispute to them, then such Vice Presidents shall
escalate the dispute to each party's respective
executive level liaisons (e.g. Licensor's CEO and
Licensee's CIO or his/her designee) for ultimate
resolution.
Limitation. Notwithstanding anything to the contrary in this Schedule
G, Maintenance Services shall include only Second Level Support and shall
exclude First Level Support.
"Second Level Support" means responding to Licensee's requests
for assistance with First Level Support issues only after
Licensee first uses commercially reasonable efforts to resolve
such issues on its own.
"First Level Support" means diagnosis, analysis and provision
of solutions to Bugs encountered by Licensee in connection
with its use of Material.
Breach. The parties agree that, due to the nature of Material, Licensor
may be unable to detect, locate and correct all Bugs. Accordingly, Licensor's
failure to supply a correction shall not by itself constitute a breach of this
Schedule G, so long as Licensor uses commercially reasonable efforts toward
supplying a correction as specified in this Schedule G.
32
