Exhibit 10.1
EXECUTION COPY
XCHANGE(R) RESELLER AGREEMENT
This Agreement, made as of this 31st day of March, 2001 (the "Effective
Date"), by and between Exchange Applications, Inc., a Delaware corporation
having a principal place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Xchange"), and ▇▇▇▇▇▇▇▇ Corporation, a Delaware
corporation having a principal place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇▇▇▇").
W I T N E S S E T H T H A T :
WHEREAS, Xchange is the owner of a customer relations management product
known as Xchange EnAct, which consists of consulting methodologies and
software and is more particularly described in the Product Schedule attached
hereto as Schedule A.
WHEREAS, ▇▇▇▇▇▇▇▇ desires to become a reseller of EnAct to potential users in
the Subject Field and Territory (as hereinafter defined);
NOW, THEREFORE, in consideration of the mutual promises and covenants of the
parties as hereinafter set forth, the parties agree as follows:
1. DEFINITIONS
1.1 For purposes of this Agreement, the following terms shall have the
respective meanings set forth below:
"Banking Services" shall have the meaning set forth on Schedule B to
this Agreement.
"Calendar Year" means January 1 through December 31 in any given
year.
"▇▇▇▇▇▇▇▇" shall have the meaning set forth in the introductory
paragraph hereto.
"▇▇▇▇▇▇▇▇ Maintenance Fees" shall mean all fees received by ▇▇▇▇▇▇▇▇
for providing maintenance and customer support services in connection with
the Software pursuant to Sublicense and Services Agreements.
"Consulting Services" shall have the meaning set forth on Schedule A
hereto.
"Documentation" means the user guides, instruction manuals, training
manuals, pamphlets and other materials related to the use of EnAct by
Sublicensees as more particularly described in the Product Schedule.
"Effective Date" shall have the meaning set forth in the
introductory paragraph hereto.
"EnAct" means the Xchange EnAct customer relations management
solution suite owned by Xchange as more particularly described in the Product
Schedule.
"EnAct Royalty" shall have the meaning set forth on Schedule D of
this Agreement.
"Event of Release" shall have the meaning set forth in Section 2.9
hereof.
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"Guaranteed Royalties" shall have the meaning set forth in Section
3.2 hereof. Guaranteed Royalties shall consist of the applicable EnAct
Royalty and Maintenance Royalty as set forth on Schedule D hereto.
"License" shall have the meaning set forth in Section 2.2 of this
Agreement.
"Indemnified Party" shall have the meaning set forth in Section 9.3
of this Agreement.
"Indemnifying Party" shall have the meaning set forth in Section 9.3
of this Agreement.
"Initial Term" means the time period from March 31, 2001 through
March 31, 2002.
"Maintenance Royalty" shall have the meaning set forth on Schedule D
attached to this Agreement.
"Maintenance Fee" shall have the meaning set forth in Section 5.2
hereof.
"Methodologies" means the methodologies of EnAct as more
particularly described in the Product Schedule.
"Non-Exclusive Term" shall have the meaning set forth in Section 4.2
of this Agreement.
"New Development" shall mean any variation, derivative work,
improvement, new discovery, enhancement or other modification to EnAct
developed or created by ▇▇▇▇▇▇▇▇ whether independently or jointly with
Xchange or any other party.
"Product Schedule" shall mean the schedule attached hereto as
Schedule A.
"Proprietary Material" shall include EnAct and any component thereof
and any other information, materials or data received by ▇▇▇▇▇▇▇▇ from
Xchange, in written, oral, machine-readable or other form, including, but not
limited to, designs, concepts, ideas, New Developments, know-how, technology
and other information that has been identified by Xchange as proprietary or
confidential (hereinafter referred to in the paragraph as "Information");
provided that "Proprietary Material" shall not include Information that
▇▇▇▇▇▇▇▇ can prove by clear and convincing written evidence to be information
which:
(i) is or becomes generally available in the public domain without
the fault of ▇▇▇▇▇▇▇▇;
(ii) is already known to ▇▇▇▇▇▇▇▇ prior to disclosure hereunder
without an obligation of confidentiality to Xchange (provided, however, that
this exception shall not include any New Development); or
(iii) is disclosed to ▇▇▇▇▇▇▇▇ by a third party without restriction
and without breach of any separate confidentiality obligation owed to Xchange.
"Quarter" means the following periods consisting of three
consecutive calendar months in any given Calendar Year: January 1 through
March 31; April 1 through June 30; July 1 through September 30; and October 1
through December 31.
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"Renewal Term" shall have the meaning set forth in section 4.1 of
this Agreement.
"Revenues" means all income, fees or revenues of any kind generated
by and/or payable to ▇▇▇▇▇▇▇▇ arising out of, relating to or in connection
with EnAct, or any of its components, including but not limited to all
royalty fees, service fees, consulting fees, maintenance fees, revenues
generated pursuant to any Sublicense and Services Agreements and all other
income, revenues and fees related to the rights afforded to ▇▇▇▇▇▇▇▇ pursuant
to this Agreement (however denominated); provided, however, that Revenues
shall not include any ▇▇▇▇▇▇▇▇ Maintenance Fees but only to the extent that
such ▇▇▇▇▇▇▇▇ Maintenance Fees do not exceed 16.66% of the total amount of
the license fee for the Software collected pursuant to such Sublicense and
Services Agreements.
In any new sublicensing arrangements entered into
by ▇▇▇▇▇▇▇▇ in which EnAct is licensed with other services or products
provided by ▇▇▇▇▇▇▇▇, the percentage of total revenues received by ▇▇▇▇▇▇▇▇
attributable to EnAct and which shall be included in Revenues shall be
determined in an equitable and commercially reasonable manner given the
relative contributions of EnAct and the other products or services provided
by ▇▇▇▇▇▇▇▇ the initial determination of which will be the Sublicensee's
allocation of such amounts pursuant to a formal Sublicensee approved business
case, a Sublicensee approved benefit tracking report or a separate
acknowledgement letter from the Sublicensee with respect to its obligation to
▇▇▇▇▇▇▇▇. Notwithstanding the foregoing, in the event that EnAct is combined
with other services or products which are then being provided by ▇▇▇▇▇▇▇▇
pursuant to an existing customer arrangement, the revenues attributable to
EnAct and which shall be included in Revenues shall be the difference between
the total amount of revenues received by ▇▇▇▇▇▇▇▇ less the amount of revenues
that would have been received without EnAct. The following are examples of
Revenues; provided, however, that such examples shall not alter or amend the
foregoing terms of this definition:
(a) FLAT CONTINGENCY WITH NO CAP - In this
situation, the value of approved or implemented and tracked benefits that are
agreed to by the client times the relevant contingency rate will be deemed to
be the price for EnAct and will be accrued at the time client agrees to
payment for same.
o Example - Approved EnAct value as agreed by client in business
case of $10,000,000 recurring annual revenue (net of expenses)
times 20% benefit approval contingency rate = $2,000,000
contingency fee payment
o Example - Realized benefits value as agreed by client and
presented in benefit tracking reports of $15,000,000 recurring
annual revenue (net of expenses) times 15% benefit approval
contingency rate = $2,250,000 contingency fee payment
(b) FLAT CONTINGENCY WITH A CAP OR WITH A NEGOTIATED
CLIENT SETTLEMENT FOR SERVICES AND RECOMMENDATIONS - In this situation the
value approved or implemented and tracked benefits that are agreed to by the
client times the relevant prorated contingency rate for the total benefits
derived from the project will be deemed to be the price for EnAct and will be
accrued at the time client agrees to payment for same.
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o Example - Approval of Enact value as agreed by client in
business case of $10,000,000 plus approval of other ▇▇▇▇▇▇▇▇
recommendations as agreed by client in business case(s) of
$10,000,000 for total benefit approvals of $20,000,000. Total
contingency fees at 30% would equal $6,000,000 but are subject
to a cap of $5,000,000. Thus, the effective pro rata
contingency rate is 25% and the price for EnAct will be deemed
to be $2,500,000.
(c) TIERED CONTINGENCY WITHOUT A CAP - In this
situation, the value approved or implemented and tracked benefits that are
agreed to by the client times the lowest applicable component of the
contingency rate schedule will be applied to determine the amount of
contingency fees derived from the project. These contingency fees will be
deemed to be the price for EnAct and will be accrued at the time client
agrees to payment for same.
o Example -- Approval of Enact value as agreed by client in
business case of $10,000,000 plus approval of other ▇▇▇▇▇▇▇▇
recommendations as agreed by client in business case(s) of
$10,000,000 for total benefit approvals of $20,000,000. Total
contingency fees at 20% for the first $10,000,000 and 15% for
benefits in excess of $10,000,000 would equal $3,500,000.
Benefits derived from other ▇▇▇▇▇▇▇▇ recommendations will be
deemed to occur at the highest rate first when distributing
the contingency fees. Thus, the effective rate for any and all
EnAct value would be deemed to be 15% and the price for EnAct
will be deemed to be $1,500,000.
The term Revenues shall not include any sales, use,
or value added taxes (except those taxes which are solely measured by
▇▇▇▇▇▇▇▇'▇ income) duties or reimbursements of reasonable out of pocket
expenses (including travel expenses) but only to the extent such amounts are
(a) included in payments made to ▇▇▇▇▇▇▇▇ by any Sublicensees, (b) separately
stated and (c) properly reported and/or paid by ▇▇▇▇▇▇▇▇.
"Royalty Fees" shall have the meaning set forth in Section 3.1 of
this Agreement. Royalty Fees shall consist of the applicable EnAct Royalty
and Maintenance Royalty as set forth on Schedule D hereto.
"Software" means the computer programs of EnAct listed in the
Product Schedule including any software licensed by Xchange from any third
party that Xchange is permitted to sublicense to ▇▇▇▇▇▇▇▇, provided, however,
that no such third party software licensed by ▇▇▇▇▇▇▇▇ shall be included in
the definition of Software and/or EnAct for purposes of Section 8 and Section
9.1 of this Agreement.
"Source Code Escrow Agreement" shall have the meaning set forth in
Section 2.9 of this Agreement.
"Source Code License" shall have the meaning set forth in Section
2.9 of this Agreement.
"Special Transactions" shall have the meaning set forth in Schedule
D of this Agreement.
"Sublicense and Services Agreement" shall have the meaning set forth
in Section 2.2 of this Agreement.
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"Sublicensee" means any party with whom ▇▇▇▇▇▇▇▇ enters into a
Sublicense and Services Agreement pursuant to the terms of this Agreement
"Subject Field" shall have the meaning set forth in Schedule B
attached to this Agreement.
"Trademarks" shall have the meaning set forth in Section 2.2 of this
Agreement.
"Territory" shall have the meaning set forth in Schedule B attached
to this Agreement.
"Term" shall mean the Initial Term, the Non-Exclusive Term and all
Renewal Terms, if any.
"Updates" means any error corrections, modifications, enhancements,
new versions or updates to the Software furnished by Xchange to ▇▇▇▇▇▇▇▇
pursuant to this Agreement that are made generally commercially available at
no additional charge (other than shipping) to other licensees of the Software
who have contracted to receive maintenance support. Updates shall not include
any error corrections, modifications, enhancements, new versions or updates
which (i) Xchange licenses separately from EnAct, (ii) are marketed under any
trademark or trade name other than EnAct, (iii) are produced and/or
distributed on a custom basis, or (iv) Xchange is prohibited from furnishing
to ▇▇▇▇▇▇▇▇.
"Unearned Royalties" shall have the meaning set forth in Section 5.2
hereof.
"Xchange" shall have the meaning set forth in the introductory
paragraph hereto.
"Xchange Services" shall have the meaning set forth on Schedule D
attached to this Agreement.
2. APPOINTMENT OF RESELLER AND GRANT OF LICENSE
2.1 Xchange hereby appoints ▇▇▇▇▇▇▇▇ as a reseller of EnAct but only to
Sublicensees in the Subject Field and within the Territory and ▇▇▇▇▇▇▇▇
hereby accepts such appointment. This appointment (i) is subject to the
provisions and is only for the Term, (ii) is personal to ▇▇▇▇▇▇▇▇ and (iii)
may not be assigned or transferred in any way, in whole or in part, nor may
▇▇▇▇▇▇▇▇ appoint sub-resellers of any kind. ▇▇▇▇▇▇▇▇ agrees that, in acting
as a reseller for Xchange, it will at all times conduct itself in accordance
with its warranties, duties and obligations set forth in this Agreement.
Provided that ▇▇▇▇▇▇▇▇ is in full compliance with its obligations under this
Agreement and has paid all Guaranteed Royalties and Royalty Fees as required
by Section 3, this reseller appointment shall be exclusive for the Subject
Field in the Territory during the Initial Term and any Renewal Term. With the
exception of the joint marketing of Special Transactions and subject to the
provisions of Section 2.7, and provided that ▇▇▇▇▇▇▇▇ is not in breach of
this Agreement, Xchange will not market EnAct, or authorize any third party
to market or license EnAct, to any customers in the Subject Field within the
Territory during the Initial Term or any Renewal Term.
2.2 Xchange hereby grants to ▇▇▇▇▇▇▇▇ a limited, nonexclusive,
nontransferable license (the "License") to (i) market EnAct, (ii) use the
Methodologies to provide Consulting Services, (iii) sublicense the Software
and Documentation and (iv) to make copies of the Software and
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Documentation for (a) archival purposes and (b) distribution but the only for
distribution in accordance with Section 2.3 below, in all cases only to
Sublicensees in the Subject Field and within the Territory pursuant to
written sublicenses (the "Sublicense and Services Agreements") which shall
contain at a minimum provisions substantially and materially as set forth on
Schedule C hereof and the form of which shall be subject to the advanced
written approval of Xchange. Xchange also hereby grants to ▇▇▇▇▇▇▇▇ a
limited, non-transferable and personal license (without the right to
sublicense) to use the trademarks, service marks and trade names set forth on
Schedule F (collectively, the "Trademarks"), but only in connection with
▇▇▇▇▇▇▇▇'▇ activities as contemplated by this Agreement and as permitted by
Section 6.
2.3 ▇▇▇▇▇▇▇▇ is only authorized to copy the Software for (i)
distribution to Sublicensees as part of EnAct pursuant to Sublicense and
Services Agreements and (ii) for ▇▇▇▇▇▇▇▇'▇ archival or back up purposes; no
other copies shall be made without Xchange's prior written consent. ▇▇▇▇▇▇▇▇
is only authorized to copy and distribute to Sublicensees the portions of the
Documentation that are specifically designated for such copying and
distribution in writing by Xchange. ▇▇▇▇▇▇▇▇ shall not copy and distribute
the Software and Documentation in a manner inconsistent with the provisions
of the Sublicenses and Services Agreement as described on Schedule C hereto.
▇▇▇▇▇▇▇▇ shall provide the following information and materials to Xchange not
less than ten days after to the distribution of any copies of the Software to
any Sublicensee:
1.) Sublicensee name;
2.) Execution date of Sublicense and Services Agreement;
3.) Software and Documentation to be copied; and
4.) Install Date.
All titles, Trademarks, copyright, patent and restricted rights notices shall
be reproduced in such copies. All copies shall be individually numbered and
▇▇▇▇▇▇▇▇ shall keep records of the number and location of all such copies.
All copies of the Software made by ▇▇▇▇▇▇▇▇ are subject to the terms of this
Agreement.
2.4 ▇▇▇▇▇▇▇▇ shall not use or duplicate any component of EnAct or make
any component of EnAct available to third parties other than as specified in
this Agreement. ▇▇▇▇▇▇▇▇ agrees that it shall not perform, and shall not
cause or permit, the reverse engineering, disassembly, or decompilation of
any component of EnAct.
2.5 Xchange shall retain all right, title, patent, copyright, trademark
and other proprietary rights in EnAct including the Software, Documentation,
Methodologies and any Updates, New Developments, enhancements, modifications
or translations thereof. ▇▇▇▇▇▇▇▇ and its Sublicensees shall not acquire any
rights in any of the components of EnAct other than those specified in this
Agreement and the Sublicense and Services Agreements.
2.6 Notwithstanding any language in this Agreement that could be
interpreted otherwise, EnAct is supplied by Xchange ONLY under the License
and ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇'▇ Sublicensees are prohibited from using or
duplicating EnAct except as expressly permitted in this Agreement or the
applicable Sublicense and Services Agreement.
2.7 Nothing in this Agreement is intended to restrict or affect, nor
shall any such provision restrict or affect, (a) any contracts, licenses,
sublicenses or other agreements in effect as of the Effective Date between
Xchange (or any party duly authorized by Xchange) and any licensee,
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sublicensee or other user of EnAct or any component thereof and (b) the right
of Xchange (or any party duly authorized by Xchange) to market, sell,
license, sublicense, distribute or otherwise commercially exploit EnAct, or
any component thereof, to (i) any and all users or potential users outside of
the Territory, whether or not such users or potential users are within the
Subject Field, (ii) any and all users or potential users outside of the
Subject Field, whether or not such users or potential users are within the
Territory or (iii) any and all licensees, sublicenses or other parties that
use or are authorized to use EnAct or any component thereof pursuant to any
contracts, licenses, sublicenses or other agreements in effect as of the
Effective Date.
2.8 During the Initial Term or any Renewal Term, Xchange shall make
reasonable commercial efforts to provide notice (electronic, written or oral)
to ▇▇▇▇▇▇▇▇ of any entities which express to Xchange an interest in EnAct and
which Xchange believes are potential Sublicensees for EnAct in the Subject
Field and within the Territory. During the Initial Term and any Renewal Term,
Xchange shall also use reasonable commercial efforts to include ▇▇▇▇▇▇▇▇ as a
subcontractor of services in its provision of EnAct outside of the Territory
as Xchange, in its sole discretion, deems appropriate.
2.9 The parties shall execute, concurrent with the execution of this
Agreement, a Software Escrow Agreement (the "Software Escrow Agreement") in
the form attached hereto as Exhibit 1. Xchange hereby grants to ▇▇▇▇▇▇▇▇ a
non-exclusive, non-assignable, and non-transferable right and license (the
"Source Code License") to possess and use the Deposit Materials (as defined
in the Software Escrow Agreement) solely for internal purposes to provide
maintenance and support of the Software used by Sublicensees until the
expiration or termination of this Agreement; provided, however, that such
Source Code License shall not be exercisable unless and until an Event of
Release (as defined below) occurs and the Deposit Materials are released
pursuant to the Software Escrow Agreement. Title to the Deposit Materials
shall remain at all times with Xchange and the Deposit Materials shall remain
confidential and proprietary to Xchange. ▇▇▇▇▇▇▇▇'▇ rights to possess and use
the Deposit Materials do not give ▇▇▇▇▇▇▇▇ any right to disclose, market,
sublicense, distribute or in any other manner make the Deposit Materials (or
their derivatives) available to third parties. ▇▇▇▇▇▇▇▇ shall not, under any
circumstances, copy, duplicate, or otherwise reproduce the Deposit Materials
in any manner other than as required for maintenance and support of the
Software and as required for archival backup. ▇▇▇▇▇▇▇▇ shall not copy,
distribute, or in any way disseminate the Deposit Materials, or any
information or ideas contained in the Deposit Materials, to any party without
the prior express written permission of Xchange. ▇▇▇▇▇▇▇▇ shall take all
steps necessary to maintain the confidentiality of the Deposit Materials. In
the Event that ▇▇▇▇▇▇▇▇ acquires the Deposit Materials pursuant to the
Software Escrow Agreement, (a) this Agreement may not be terminated for
Xchange's failure to provide the maintenance and support services set forth
in this Agreement, (b) Xchange shall be relieved of, and ▇▇▇▇▇▇▇▇ shall
assume, all of Xchange's maintenance and support obligations pursuant to this
Agreement, (c) ▇▇▇▇▇▇▇▇ shall be relieved of its obligation to make
Maintenance Fee payments pursuant to Section 5.2 and Xchange shall be
relieved of its obligation to provide a credit pursuant to Section 5.2, and
(d) all other provisions of this Agreement shall remain in full force and
effect. The parties acknowledge and agree that the Software Escrow Agreement
shall be supplementary to this Agreement pursuant to 11 U.S.C. Section 365(n)
and that if Xchange, as a debtor in possession, or trustee in bankruptcy in a
case under Title 11 of the United States Code rejects this Agreement,
▇▇▇▇▇▇▇▇ may elect to retain its rights under this Agreement as provided in
11 U.S.C. Section 365(n).
An "Event of Release" shall mean (a) the dissolution or
liquidation of Xchange
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or the institution by or against Xchange of any bankruptcy, reorganization,
debt arrangement, assignment for the benefit of creditors or other proceeding
under any bankruptcy or insolvency law or dissolution, receivership or
liquidation proceeding that remains unstayed or undismissed for a period of
ninety (90) days; or (b) any unjustified and permanent failure on the part of
Xchange to materially fulfill its maintenance and support obligations in
accordance with the terms of this Agreement after written notice of such
failure and an opportunity to cure within thirty (30) days of such written
notice and without the occurrence of any breach by ▇▇▇▇▇▇▇▇.
3. ROYALTIES
3.1 Subject to the requirements for Guaranteed Royalties set forth in
Section 3.2 and 3.3 below, ▇▇▇▇▇▇▇▇ shall pay to Xchange the royalty fees
(the "Royalty Fees") during the Initial Term and each Renewal Term thereafter
as set forth on Schedule D hereto.
3.2 ▇▇▇▇▇▇▇▇ shall pay to Xchange nonrefundable guaranteed royalty
payments (the "Guaranteed Royalties") for the Initial Term in the amounts and
on the due dates set forth in Schedule D attached hereto. If ▇▇▇▇▇▇▇▇
exercises its option to renew this Agreement pursuant to Section 4.1 of this
Agreement for any Renewal Term, ▇▇▇▇▇▇▇▇ shall make payment for Guaranteed
Royalties for such Renewal Term as set forth on Schedule D hereto. ▇▇▇▇▇▇▇▇
shall pay all Guaranteed Royalties notwithstanding the actual amount of
Revenues earned by ▇▇▇▇▇▇▇▇ in the Initial Term or any Renewal Term
thereafter and no Guaranteed Royalties shall be subject to refund.
3.3 If the Royalty Fees earned during the course of the Initial Term or
any Renewal Term thereafter exceed the amount of any installment, or
combination of installments of the Guaranteed Royalties previously made for
such term, then any and all Royalty Fees earned in excess of the total amount
of the Guaranteed Royalties previously paid for such Initial Term or Renewal
Term shall be calculated on a Quarterly basis and shall be due and payable on
the 30th day after the end of the Quarter in question beginning with the
first Quarter within which such excess Royalty Fees are earned. All such
payments shall be used to offset any future Guaranteed Royalties to be due
and owing in such Initial Term or Renewal Term, as the case may be.
3.4 All Guaranteed Royalties, Royalty Fees or Maintenance Fees are
payable in U.S. Dollars. The Guaranteed Royalties, Royalty Fees and
Maintenance Fees shall be exclusive of all federal, state local or other
sales, use, value added excise or other taxes (except those which are solely
measured by Xchange's Income) whether currently imposed or applicable in the
future, all of which ▇▇▇▇▇▇▇▇ shall be liable for and all of which ▇▇▇▇▇▇▇▇
shall be responsible for reporting and paying. In the event that Xchange is
required to pay any such tax, ▇▇▇▇▇▇▇▇ shall reimburse Xchange for the same
within five days of any written or oral demand made by Xchange. To the extent
that Revenues are to be paid to ▇▇▇▇▇▇▇▇ in currency other than United States
dollars, then for purposes of calculating Royalty Fees, Maintenance Fees or
▇▇▇▇▇▇▇▇ Maintenance Fees, such amounts shall be converted into United States
dollars on the date such Revenues are recorded as income on the books of
▇▇▇▇▇▇▇▇ at the then current exchange rate as set forth on that date (or the
next business day if such date is not a business day) in the Wall Street
Journal.
3.5 Any Guaranteed Royalties, Royalty Fees or Maintenance Fees payable
to Xchange that are not paid when due shall bear interest at the rate of one
percent (1%) per month, compounded monthly, or at the maximum rate permitted
by law. Amounts received by Xchange hereunder shall first be credited against
any unpaid interest accrued pursuant to this Section 3.5, and accrual
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of such interest shall be in addition to and without limitation of any and
all additional rights or remedies which Xchange may have hereunder or at law
or in equity. In the event that Xchange is required to bring any action to
collect any amounts due under this Agreement, Xchange shall be entitled to
reimbursement by ▇▇▇▇▇▇▇▇ for the reasonable costs of such collection
(including without limitation reasonable attorneys' fees).
4. TERM; TERMINATION
4.1 During the Initial Term and for so long as this Agreement is in
effect, ▇▇▇▇▇▇▇▇ shall have the perpetual option to renew this Agreement for
additional terms (each a "Renewal Term") beginning with the period from April
1, 2002 to December 31, 2002, and for each Calendar Year thereafter by (a)
providing written notice to Xchange no later than (i) March 1, 2002 for the
first Renewal Term and (ii) October 1 of the Calendar Year prior to each
Renewal Term thereafter, and (b) making payment of the Guaranteed Royalties
for such Renewal Terms as set forth in Section 3.
4.2 If ▇▇▇▇▇▇▇▇ does not exercise its option to renew this Agreement at
the end of the Initial Term or any Renewal Term and the total amount of
Royalty Fees actually earned by Xchange during the Initial Term and any
Renewal Term does not exceed the Guaranteed Royalties for the Initial Term
and any Renewal Term, then ▇▇▇▇▇▇▇▇ shall be permitted to continue to act as
a reseller of EnAct under the terms of this Agreement on a non-exclusive
basis until Royalty Fees have been earned in an amount equal to all such
Guaranteed Royalties (the "Non-Exclusive Term").
4.3 Upon termination or expiration of this Agreement, ▇▇▇▇▇▇▇▇ shall
immediately cease all marketing and other activities relating to EnAct.
However, in the event that this Agreement expires or terminates for any
reason other than pursuant to Sections 4.4 or 4.6 hereof, ▇▇▇▇▇▇▇▇ may
continue to provide Consulting Services and other maintenance or user
services to Sublicensees during the remainder of the term of any Sublicense
and Services Agreement in effect at that time. In the event that this
Agreement is terminated pursuant to sections 4.4 or 4.6, Xchange shall have
the option to require ▇▇▇▇▇▇▇▇ to assign its rights and interests in any such
Sublicense and Services Agreement by providing written notice to ▇▇▇▇▇▇▇▇ and
such assignment shall be effective upon the thirtieth (30th) day after such
notice. Notwithstanding any expiration or termination, all applicable
provisions of the Agreement shall apply in the event that ▇▇▇▇▇▇▇▇ continues
to provide Consulting Services and other maintenance or user services to
Sublicensees.
4.4 This Agreement shall automatically terminate if ▇▇▇▇▇▇▇▇ shall file
a petition in bankruptcy, shall be adjudicated a bankrupt, shall take
advantage of the insolvency laws of any jurisdiction to which it is subject,
shall make an assignment for the benefit or creditors, shall be voluntarily
or involuntarily dissolved, shall admit in writing its inability to pay debts
as they come due, shall have a receiver, trustee or other court officer
appointed for its property, shall have had a bankruptcy petition filed
against it that has not been discharged within sixty days of the filing
thereof or shall commit any other act of bankruptcy.
4.5 ▇▇▇▇▇▇▇▇ shall have the option to terminate this Agreement if
Xchange shall file a petition in bankruptcy, shall be adjudicated a bankrupt,
shall take advantage of the insolvency laws of any jurisdiction to which it
is subject, shall make an assignment for the benefit or creditors, shall be
voluntarily or involuntarily dissolved, shall admit in writing its inability
to pay debts as they come due, shall have a receiver, trustee or other court
officer appointed for its property, shall
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have had a bankruptcy petition filed against it that has not been discharged
within sixty (60) days of the filing thereof or shall commit any other act of
bankruptcy.
4.6 If ▇▇▇▇▇▇▇▇ shall fail to perform or shall be in breach of any of
its obligations hereunder, and shall have failed or been unable to remedy
said failure or breach within thirty (30) days after receipt of written
notice from Xchange with respect thereto, Xchange may terminate this
Agreement, hereunder, by giving written notice of termination to ▇▇▇▇▇▇▇▇. In
addition to the foregoing, Xchange shall be entitled all remedies available
under law or equity.
4.7 If ▇▇▇▇▇▇▇▇ shall not have paid Xchange the full amount of any
outstanding Guaranteed Royalties, Royalty Fees or Maintenance Fees for the
Initial Term or any Renewal Term as of the date of any termination or
expiration, then the unpaid balance of such Guaranteed Royalties, Royalty
Fees or Maintenance Fees shall become due and payable within ten (10) days
following the date of termination.
4.8 In the event of any termination or expiration of this Agreement,
and, if applicable, upon the date that the rights afforded to ▇▇▇▇▇▇▇▇ in
Section 4.3 shall cease, ▇▇▇▇▇▇▇▇ (i) shall deliver to Xchange all copies of
EnAct or Proprietary Material in ▇▇▇▇▇▇▇▇'▇ possession, custody or control;
and (ii) shall destroy all copies of EnAct or Proprietary Material, and
render unusable information and data relating to thereto stored in any
storage facility which for any reason cannot be delivered to Xchange. An
authorized representative of ▇▇▇▇▇▇▇▇ shall certify in writing to Xchange
that all Proprietary Material in its possession, custody or control has been
delivered to Xchange, destroyed or rendered unusable. Xchange shall have the
option to terminate or require ▇▇▇▇▇▇▇▇ to terminate any Sublicense and
Services Agreements pursuant to which the Sublicensee is in default.
4.9 Notwithstanding any termination or expiration of this Agreement,
▇▇▇▇▇▇▇▇ shall remain liable to Xchange for payments accruing pursuant to
this Agreement. Termination of this Agreement by expiration or otherwise
shall not release ▇▇▇▇▇▇▇▇ from any of its obligations or liabilities accrued
or incurred hereunder or rescind or give rise to any right to rescind any
payment made to Xchange hereunder; provided, however, that in the event that
▇▇▇▇▇▇▇▇ terminates this Agreement pursuant to Section 4.5, the amount then
currently due or accruing to Xchange pursuant to this Agreement shall be
equal to the greater of (a) the total amount of Guaranteed Royalties for the
term, whether it be the Initial Term or any Renewal Term, in which the
Agreement is terminated prorated in accordance with the number of days that
the Agreement shall have been in effect during such term or (b) the total
amount of Royalty Fees (excluding Guaranteed Royalties) due and payable to
Xchange at the time of termination. In no event shall ▇▇▇▇▇▇▇▇ be entitled to
any refund of payments already made to Xchange
4.10 ▇▇▇▇▇▇▇▇ hereby agrees that it shall not be entitled to damages of
any kind or to an injunction or order of any kind arising out of or in
connection with or relating to the termination or expiration of this
Agreement or its appointment as a reseller of Xchange and, to the maximum
extent permitted by law, waives any right, defense, action or claim it may
have under any law, rule, regulation or decision in whole or in part for the
protection of franchisees, resellers, dealers and/or distributors.
4.11 Sections 2.4, 2.5, 4, 6.2, 6.5, 7.1(xi), 8.2, 8.3, 8.4, 8.6, 9,
10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.8, 10.9, 11 and 12 shall survive any
expiration or termination of this Agreement.
-11-
5. TRAINING; MAINTENANCE; SUPPORT
5.1 Provided that ▇▇▇▇▇▇▇▇ is in full compliance with the terms of this
Agreement, including without limitation the payment of all Royalty Fees,
Guaranteed Royalties and Maintenance Fees (as defined in Section 5.2),
Xchange shall use reasonable commercial efforts to provide maintenance and
support services for the Software in accordance with Schedule E attached
hereto. Such maintenance and support services shall be provided during the
Initial Term, any Renewal Term and for a period of twelve months after the
date of the last Guaranteed Royalty payment made by ▇▇▇▇▇▇▇▇; provided,
however, that if ▇▇▇▇▇▇▇▇ makes any Royalty Fee payments in excess of
Guaranteed Royalties after the date of the last Guaranteed Royalty payments,
Xchange shall provide such maintenance and support in connection with
▇▇▇▇▇▇▇▇'▇ support of the Sublicense and Services Agreements contributing to
such excess Royalty Fee for a period of 12 months after such payment.
▇▇▇▇▇▇▇▇ shall designate at least one system manager and one alternate, in
the event the system manager is not available, for receipt of maintenance and
support services from Xchange. Xchange's maintenance and support obligations
pursuant to this Section 5.1 shall be limited to the most current version of
the Software and the next most current version of the Software; provided,
however, that with respect to such next most current version, such
maintenance and support obligations shall only be in effect until twelve
months after the release of the current version.
5.2 Unless otherwise agreed to by the parties, ▇▇▇▇▇▇▇▇'▇ obligation to
pay Maintenance Fees shall be automatically renewed on an annual basis from
the date of the Guaranteed Royalty payment or any Royalty Fee payment in
excess of Guaranteed Royalties and each such Maintenance Fee shall be equal
to ten percent (10%) of each applicable prior EnAct Royalty (whether
attributable to a Guaranteed Royalty payment or a Royalty Fee payment) and
shall be paid annually in advance on the yearly anniversary date of the Enact
Royalty in question. Guaranteed Royalties that become due and payable during
any Renewal Term pursuant to Schedule D hereto shall be reduced by ten
percent (10%) of the cumulative amount of any Unearned Royalties (as defined
below) that accrue during the Initial Term or any prior Renewal Term, to the
extent that such Unearned Royalties have not already been deducted from prior
Guaranteed Royalties. "Unearned Royalties" shall mean the difference between
the total amount of EnAct Royalty paid by ▇▇▇▇▇▇▇▇ during the Initial Term or
during any Renewal Term less the actual amount of EnAct Royalties that would
have been paid based solely upon Royalty Fees (and not Guaranteed Royalties)
for such Initial Term or Renewal Term. In the event that a Sublicensee does
not renew its annual maintenance arrangement under its Sublicense and
Services Agreement, Xchange shall provide to ▇▇▇▇▇▇▇▇ a credit, prorated as
appropriate to reflect actual usage of maintenance during the period in
question, equal to 10% of the EnAct Royalty paid by ▇▇▇▇▇▇▇▇ attributable to
such Sublicense and Services Agreement to be applied against the Maintenance
Royalty payment component of the next scheduled Guaranteed Royalty and, if
applicable, in each Maintenance Fee payment thereafter.
5.3 ▇▇▇▇▇▇▇▇ is responsible for providing to Sublicensees (i) first line
support, skilled instructors and technical assistance to Sublicensees with
respect to the Software and (ii) for providing complete support, including
Consulting Services, for all other components of EnAct. Such first line
support (referred to in clause (i) of the prior sentence) shall include, but
not be limited to, answering questions about using the Software, ensuring
that the Software is used by Sublicensees in accordance with the
Documentation, and determining the origin of problems.
-12-
5.4 Provided that ▇▇▇▇▇▇▇▇ is in full compliance with the terms of this
Agreement, including without limitation the payment of all Royalty Fees and
Guaranteed Royalties, Xchange shall provide to ▇▇▇▇▇▇▇▇ one (1) copy of each
Update (in object code format), and to the corresponding Documentation, if
any. ▇▇▇▇▇▇▇▇ shall be responsible for copying and distributing Updates and
other maintenance to Sublicensees; provided, however that ▇▇▇▇▇▇▇▇ shall not
distribute any such Updates to any Sublicensee that is not in full compliance
with the terms of its Sublicense and Services Agreement.
5.5 In the event that Xchange performs maintenance services with respect
to the Software that, pursuant to Schedule E should have been performed by
▇▇▇▇▇▇▇▇, then ▇▇▇▇▇▇▇▇ will reimburse Xchange for such services that were
reasonably incurred by Xchange at Xchange's then current rates. ▇▇▇▇▇▇▇▇ will
also reimburse Xchange for all actual and reasonable expenses incurred in the
performance of such services.
5.6 Xchange shall use reasonable commercial efforts to provide Xchange
Services in accordance with the applicable provisions set forth on Schedule D
hereto.
6. TRADEMARKS
6.1 ▇▇▇▇▇▇▇▇ shall identify itself as an authorized reseller of EnAct in
connection with all of its reselling activities which are contemplated by
this Agreement. ▇▇▇▇▇▇▇▇ only shall use the Trademarks in connection with the
marketing of EnAct in accordance with the terms of this Agreement. The
Trademarks shall remain the sole property of Xchange and shall inure to the
benefit of Xchange and ▇▇▇▇▇▇▇▇ will have no rights in such marks except as
expressly set forth herein. ▇▇▇▇▇▇▇▇'▇ use of Trademarks shall be under
Xchange's trademark policies and procedures then in effect.
6.2 ▇▇▇▇▇▇▇▇ shall not market EnAct in any way which implies that EnAct
is the proprietary product of ▇▇▇▇▇▇▇▇ or of any party other than Xchange.
▇▇▇▇▇▇▇▇ shall not use, directly or indirectly, in whole or in any part
thereof, any Trademark prior to or subsequent to the term of this Agreement
or as part of ▇▇▇▇▇▇▇▇'▇ corporate or business name or in any other manner
not specified by this Agreement. ▇▇▇▇▇▇▇▇ shall not use any other ▇▇▇▇ likely
to cause confusion with the Trademarks as any portion of ▇▇▇▇▇▇▇▇'▇ trade
name or trademark for any products of ▇▇▇▇▇▇▇▇.
6.3 ▇▇▇▇▇▇▇▇ agrees with respect to each Trademark, to include in each
advertisement, brochure, or other such use of the Trademark, the trademark
symbol "(R)" and the following statement:
"EnAct(R)" (or other Trademark) is a registered trademark of Exchange
Applications Inc., ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
or such other or further statement as Xchange may reasonably request.
6.4 ▇▇▇▇▇▇▇▇ shall not remove, deface or change, or cause to be removed,
defaced or changed, as the case may be, any Documentation or any labels,
tags, packaging, serial numbers, notices, model numbers, designations or
other information or material of any kind affixed to or incorporated in any
component of Enact. All advertising copy, ideas, campaigns, programs, in
whatever form and in any media, undertaken by or on behalf of ▇▇▇▇▇▇▇▇ and
related in any way
-13-
or referring, in whole or in part, to Xchange or EnAct must be specifically
approved by Xchange, in writing, prior to dissemination to the public or any
potential Sublicensees. ▇▇▇▇▇▇▇▇ shall permit Xchange to make reasonable
quality control inspections with respect to the use of the Trademarks, but
Xchange shall not be liable to ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇'▇ Sublicensees or others
for its failure to do so or for any defects which it discovers or could or
would have discovered by so doing.
6.5 Upon the expiration or termination of this Agreement, ▇▇▇▇▇▇▇▇ shall
have no further rights to use the Trademarks; and at no time shall ▇▇▇▇▇▇▇▇
make any claim thereto or against the use thereof by Xchange or other duly
authorized party. Xchange shall not have any liability to ▇▇▇▇▇▇▇▇ for any
claims made by third parties relating to ▇▇▇▇▇▇▇▇'▇ use of the Trademarks.
7. DUTIES AND REPRESENTATIONS OF ▇▇▇▇▇▇▇▇
7.1 ▇▇▇▇▇▇▇▇ covenants, represents and agrees that it will have the
personnel, knowledge and skill necessary to market and sublicense EnAct and
provide all necessary or desirable services to Sublicensees in connection
therewith, and agrees that it shall, at its sole expense:
(i) provide Sublicensees with Consulting Services, installation
services, first line maintenance services and other assistance in the use of
EnAct complying, at a minimum, with Sections 5.1, 5.3, and 5.4 hereof;
(ii) require its personnel to successfully complete such training on
the marketing, use, configuration, installation, and servicing of EnAct as
Xchange may, from time to time, reasonably require;
(iii) fully comply with all product literature, user manuals or other
Documentation provided to ▇▇▇▇▇▇▇▇ for use with EnAct;
(iv) keep complete and accurate records of warranty claims and
requests for maintenance services or other assistance and of actions taken in
response thereto, and promptly make available all such records to Xchange,
upon receipt of a written request;
(v) promote, advertise and market EnAct to potential customers in the
Subject Field and within the Territory;
(vi) avoid deceptive, misleading, illegal, or unethical practices that
may be detrimental to Xchange or to EnAct;
(vii) not make any representations, warranties, or guarantees (oral or
written) to Sublicensees concerning EnAct that are inconsistent with or in
addition to those made in this Agreement by Xchange;
(viii) not infringe Xchange's or any third party's copyright or other
proprietary rights in EnAct and not enter into any Sublicense and Services
Agreement that by its terms or by operation of law will abridge or infringe
upon Xchange's proprietary rights in and/or to EnAct;
(ix) comply with all applicable federal, state, local and foreign laws
and regulations in performing its duties with respect to its performance of
this Agreement;
-14-
(x) provide Quarterly reports certified by an officer of ▇▇▇▇▇▇▇▇
detailing Revenues, and Royalty Fees on a Quarterly and year to date basis
and such reports shall be in the form provided by Xchange and shall include
such additional information pertaining to Revenues and Royalty Fees as
Xchange reasonably requests. Such reports shall be delivered to Xchange no
later than the 45th day after the end of the applicable Quarter or year; and
(xi) at its own expense, keep and maintain complete and accurate books
and records concerning the Revenues and the use and marketing of EnAct during
the Term and for period of three (3) years thereafter. During the Term and
for such three (3) year period thereafter, Xchange, or its authorized
representative, shall have the right to examine and audit, at Xchange's
expense and during normal business hours, all of ▇▇▇▇▇▇▇▇'▇ books and records
which may reasonably pertain to this Agreement at ▇▇▇▇▇▇▇▇'▇ place of
business as set forth in the preamble to this Agreement. If an audit reveals
that ▇▇▇▇▇▇▇▇ has underpaid Royalty Fees to Xchange, due to (a)
underreporting its royalties or fees, (b) the failure of ▇▇▇▇▇▇▇▇ or any
Sublicensee to properly allocate revenues or fees to EnAct in a commercially
reasonable manner or (c) any other reason, ▇▇▇▇▇▇▇▇ shall immediately pay
such underpaid Royalty Fees plus interest as provided for in Section 3.5. If
the underpaid Royalty Fees are in excess of five percent (5%), then, in
addition to the past due fees and interest due thereon, ▇▇▇▇▇▇▇▇ shall pay
Xchange's reasonable costs of conducting the audit. Xchange shall be entitled
to conduct no more than two audits during any Calendar Year within the Term.
7.2 ▇▇▇▇▇▇▇▇ covenants and agrees that it will not use, market,
distribute, export, re-export, sell, ship or transfer EnAct or any component
thereof in violation of any applicable law, rule or regulation of the United
States, or any State of the United States or any foreign country of
applicable jurisdiction (including without limitation any United States or
foreign law, rule or regulation relating to technology export or transfer)
and it specifically agrees that it will not market, distribute, export,
re-export, sell, ship or transfer EnAct or any component thereof: (i) to any
end-user who ▇▇▇▇▇▇▇▇ knows or has reason to know will utilize EnAct or any
component thereof in the design, development or production of nuclear,
chemical or biological weapons; or (ii) to any end-user who has been
prohibited from participating in U.S. export transactions by any federal
agency of the U.S. Government.
8. WARRANTIES; LIMITATIONS
8.1 Xchange warrants that (a) it has the right to license EnAct pursuant
to the terms set forth in this Agreement, (b) to the best of Xchange's
knowledge, EnAct does not infringe upon any patent, copyright, trademark,
trade secret or other proprietary right of any third party, in all cases
currently existing under the laws of the United States or any other
jurisdiction within the Territory and (c) at the time of initial delivery of
the Software (or any Update) to ▇▇▇▇▇▇▇▇ under this Agreement, and for a
period of one year after the delivery of such Software or Update, as the case
may be, each such copy will be a true copy of Xchange's standard version
thereof, as most recently released by Xchange and that its functionality will
materially conform to the Documentation furnished to ▇▇▇▇▇▇▇▇ for use
therewith.
8.2 EXCEPT AS SPECIFICALLY PROVIDED HEREIN, THE SOFTWARE IS NOT
ERROR-FREE AND IS BEING PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND AND
XCHANGE HEREBY DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED,
ORAL OR WRITTEN WITH RESPECT TO THE
-15-
SOFTWARE INCLUDING, WITHOUT LIMITATION, ALL IMPLIED WARRANTIES OF TITLE,
NON-INFRINGEMENT, NON-INTERFERENCE WITH ENJOYMENT, ACCURACY, SECURITY,
COMPATIBILITY, INTEGRATION, VALIDITY, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE AND ALL WARRANTIES IMPLIED FROM ANY COURSE OF DEALING OR
USAGE OF TRADE. ▇▇▇▇▇▇▇▇ ACKNOWLEDGES THAT EXCEPT AS EXPRESSLY PROVIDED
HEREIN NO OTHER WARRANTIES WITH RESPECT TO ENACT HAVE BEEN MADE TO ▇▇▇▇▇▇▇▇
BY OR ON BEHALF OF XCHANGE OR OTHERWISE FORM THE BASIS FOR THE BARGAIN
BETWEEN THE PARTIES.
8.3 XCHANGE'S TOTAL LIABILITY TO ▇▇▇▇▇▇▇▇ FOR ANY CAUSE WHATSOEVER,
REGARDLESS OF THE FORM OF ANY CLAIM OR ACTION, SHALL NOT EXCEED THE ROYALTY
FEES PAID TO XCHANGE BY ▇▇▇▇▇▇▇▇ WITH RESPECT TO THE TRANSACTIONS IN QUESTION
AND SHALL BE, TO THE EXTENT POSSIBLE, OFFSET FROM ANY GUARANTEED ROYALTIES OR
EXCESS ROYALTY FEES OWED BY ▇▇▇▇▇▇▇▇ TO XCHANGE PURSUANT TO THIS AGREEMENT.
IN NO EVENT SHALL XCHANGE BE LIABLE FOR SPECIAL, PUNITIVE, INDIRECT,
INCIDENTAL, CONSEQUENTIAL OR TORT DAMAGES, INCLUDING WITHOUT LIMITATION ANY
DAMAGES RESULTING FROM LOSS OF USE, LOSS OF DATA, LOSS OF PROFITS, CLAIMS BY
THIRD PARTIES, LOSS OF BUSINESS ARISING OUT OF OR IN CONNECTION WITH THE
PERFORMANCE OF ENACT OR XCHANGE'S PERFORMANCE OF SERVICES OR OF ANY OTHER
OBLIGATIONS RELATING TO ENACT, EVEN IF XCHANGE HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES AND REGARDLESS OF WHETHER ANY REMEDY HEREIN FAILS
OF ITS ESSENTIAL PURPOSE.
8.4 Xchange's warranties pursuant to Section 8 shall be limited to the
most current version of the Software. The sole remedy for the breach by
Xchange of the warranties set forth in Sections 8.1(a) and 8.1(b) shall be
limited to the indemnification provisions set forth in Section 9.1 below.
Xchange's obligations for breach of the warranty set forth in Section 8.1(c)
shall be limited, at Xchange's option, to corrections or replacement of that
portion of the Software which fails to conform to such warranty, a refund of
any Royalty Fees or Guaranteed Royalties paid by ▇▇▇▇▇▇▇▇ for the copies in
question or an offset of Royalty Fees or Guaranteed Royalties that have or
will become due and payable from ▇▇▇▇▇▇▇▇ for the copies in question. In no
event shall Xchange be liable for any breach of warranty unless notice
thereof is given to Xchange within one year from Xchange's delivery to
▇▇▇▇▇▇▇▇ of the Software in question. Xchange shall have no liability insofar
as:
(i) ▇▇▇▇▇▇▇▇ or a Sublicensee modifies the Software without the prior
written consent of Xchange;
(ii)the Software is misused or exposed to environmental or operating
conditions beyond those specified in writing by Xchange;
(iii) the Software is damaged, altered or affected by accident,
neglect, misuse or other abuse by other than Xchange employees or agents;
(iv) the claimed defect or error has been caused, in whole or in part,
by persons other than Xchange or by products, equipment or computer programs
not provided by Xchange;
-16-
(v) the Software is not used with the operating systems or hardware
specified in the Documentation or as otherwise specified in the Documentation.
8.5 In no event shall Xchange have any responsibility to correct any
database errors or any errors or damages caused by or arising out of hardware
defects or input errors.
8.6 ▇▇▇▇▇▇▇▇ shall make no representation or warranty concerning the
quality, performance or other characteristics of EnAct, or Xchange's
obligations with respect thereto, other than those which are consistent in
all respects with, and do not expand the scope of, the warranties set forth
herein. ▇▇▇▇▇▇▇▇ shall include in each Sublicense and Services Agreement
granting the right to use EnAct appropriate provisions effective to limit
Xchange's warranty liability as provided herein.
8.7 Provided that ▇▇▇▇▇▇▇▇ is in full compliance with the terms of this
Agreement, during the Initial Term or any Renewal Term, and unless otherwise
required by law, Xchange shall make no representation to customers or
prospective customers of ▇▇▇▇▇▇▇▇ concerning the quality, performance or
other characteristics of ▇▇▇▇▇▇▇▇'▇ performance of it obligations under this
Agreement without the consent of ▇▇▇▇▇▇▇▇.
9. INDEMNIFICATION
9.1 Except as provided in Sections 8 (other than 8.1(a) and 8.1(b)) and
9.2 and subject to Sections 9.3 and 9.4 below, Xchange will defend ▇▇▇▇▇▇▇▇
against, or, at its option, settle any and all claims brought against
▇▇▇▇▇▇▇▇ to the extent that such claim is based upon an assertion that EnAct
infringes any valid patent, copyright, trademark, trade secret or other
proprietary rights of a third party, in all cases currently existing under
the laws of the United States or any other jurisdiction within the Territory
and shall indemnify ▇▇▇▇▇▇▇▇ against any and all costs, damages, and expenses
(including, without limitation, reasonable attorneys' fees) finally awarded
against ▇▇▇▇▇▇▇▇ as a direct result of any such claim
9.2 Xchange shall have no liability for and, subject to Section 9.3
below, ▇▇▇▇▇▇▇▇ will, at its own expense defend Xchange against, or at its
own option settle, (i) any claims for any infringement based upon (a)
combination of EnAct with other products or services not furnished by Xchange
or (b) any addition to or modification of EnAct made after delivery of EnAct
to ▇▇▇▇▇▇▇▇ by any person other than Xchange, to the extent that such
infringement is caused in whole or in part by the combination, addition or
modification, (ii) any claims arising out of the use of a superseded or
altered release of EnAct if the infringement would have been avoided by the
use of a current or unaltered release of EnAct that Xchange provides to
▇▇▇▇▇▇▇▇; (iii) any claims arising out of the combination, operation or use
of any component of EnAct furnished under this Agreement with software,
hardware or other materials not furnished by Xchange if such infringement
would have been avoided by the use of EnAct without such software, hardware
or other materials and (iv) any claims arising out of or relating to any
breach by ▇▇▇▇▇▇▇▇ of this Agreement or any representations or warranties
made by ▇▇▇▇▇▇▇▇ which are inconsistent with, in addition to or beyond the
scope of those provided by Xchange in this Agreement; and ▇▇▇▇▇▇▇▇ shall
indemnify Xchange against any and all costs, damages, and expenses
(including, without limitation, reasonable attorneys' fees) finally awarded
against Xchange as a direct result of any such claim.
-17-
9.3 The rights of either party (the "Indemnified Party") to the
indemnification from the other party (the "Indemnifying Party") set forth in
Sections 9.1 and 9.2 above are subject to the Indemnifying Party receiving
from the Indemnified Party (i) prompt written notice of any such claim (but
failure to give such prompt notice shall not be a disqualification to
indemnification unless such failure results in material and permanent
prejudice to the defense of the claim), and (ii) all reasonable requested
assistance, in the defense or settlement of such claim or suit. The
Indemnifying Party shall provide reimbursement for out of pocket expenses
incurred by the Indemnified Party in providing requested assistance
hereunder. The Indemnifying Party shall be given the full and complete
authority and control of the defense or any negotiated settlement relative to
the subject matter of this Section 9.3; provided that the (a) Indemnified
party shall be entitled to appear, at its own expense, at any hearing or
proceeding related thereto and (b) any settlement or resolution entered into
by the Indemnifying Party must completely release the Indemnified Party from
the Indemnifying Party all liability related to the claim. In no event shall
the Indemnifying Party be responsible for the settlement of any claim by
entered into by the Indemnified Party unless such party (i) was given full
notice of the terms and conditions of the settlement and (ii) has expressed
its approval to such settlement in writing.
9.4 Should EnAct or any part thereof become, or in Xchange's opinion be
likely to become, the subject of a claim of infringement, Xchange shall use
reasonable commercial efforts to either procure for ▇▇▇▇▇▇▇▇ and its
Sublicensees the right to continue using EnAct or replace or modify EnAct to
make it non-infringing. In the event that Xchange is unable to procure such
rights or make such replacements or modifications by reasonable commercial
efforts, Xchange shall have the option to terminate this Agreement or any
relevant Sublicense and Services Agreements issued for the infringing
components of EnAct and provide a refund of the applicable Guaranteed
Royalties or Royalty Fees paid to Xchange by ▇▇▇▇▇▇▇▇ related thereto in an
amount that is fair and equitable under the circumstances and is depreciated
over a period of three (3) years.
9.5 This Section 9 states the entire liability of Xchange and the sole
and exclusive remedy of ▇▇▇▇▇▇▇▇ with respect to any claim of infringement by
EnAct or any other claim referred in this Section 9 brought against ▇▇▇▇▇▇▇▇
by any Sublicensee, or brought against ▇▇▇▇▇▇▇▇ or any Sublicensee by a third
party.
10. PROTECTION OF PROPRIETARY RIGHTS
10.1 ▇▇▇▇▇▇▇▇ acknowledges that the Proprietary Material is confidential
and constitutes valuable assets of Xchange or of a third party licensor of
Xchange. ▇▇▇▇▇▇▇▇ shall not use any Proprietary Material for any purpose not
specifically authorized in this Agreement, shall hold such Proprietary
Material in confidence and shall not disclose any Proprietary Material
licensed hereunder to any third parties.
10.2 ▇▇▇▇▇▇▇▇ shall limit access to Proprietary Material to those
employees whose use of or access to the Proprietary Material is necessary to
▇▇▇▇▇▇▇▇'▇ use of EnAct. ▇▇▇▇▇▇▇▇ has entered or will enter into appropriate
written agreements with its employees to prevent the unauthorized use,
disclosure or copying of any Proprietary Material and shall take all
necessary precautions to protect and maintain the confidentiality of the
Proprietary Material, including at a minimum, those precautions ▇▇▇▇▇▇▇▇
employs to protect its own confidential information. ▇▇▇▇▇▇▇▇ shall not
disclose, publish, display or otherwise make available to any person any of
the Proprietary Material or copies thereof without Xchange's prior written
consent. ▇▇▇▇▇▇▇▇ shall not duplicate,
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copy or reproduce any of the Proprietary Material, except with the prior
written consent of Xchange.
10.3 ▇▇▇▇▇▇▇▇ shall not remove any copyright or other proprietary rights
notice included in any Proprietary Material and shall reproduce all such
notices on any copies of Proprietary Material which ▇▇▇▇▇▇▇▇ may make.
10.4 All title, copyright and other proprietary rights to all Proprietary
Material furnished by Xchange to ▇▇▇▇▇▇▇▇ and in all copies made by ▇▇▇▇▇▇▇▇
shall be retained by Xchange or of its third party licensor.
10.5 ▇▇▇▇▇▇▇▇ shall provide to Xchange prompt notice and a complete
description (including copies of any related software or other materials) of
any New Development. All New Developments shall be deemed works for hire and
shall be owned exclusively by Xchange. In the event that under any applicable
law a New Development fails to constitute a work for hire, ▇▇▇▇▇▇▇▇ hereby
irrevocably assigns and transfers to Xchange, free from all liens and other
encumbrances, any and all title, rights and interests that it shall have or
come to have in any such New Development. If any part of a New Development
does not constitute a work for hire and is prohibited from assignment under
applicable law, then ▇▇▇▇▇▇▇▇ hereby grants to Xchange an exclusive,
transferable, perpetual, royalty free license (with the right to sublicense)
to make, use, copy, distribute, license, create derivative works from and
otherwise to exploit and enjoy in any way any such New Development or portion
thereof. At the end of the Term, ▇▇▇▇▇▇▇▇ shall have a perpetual,
non-exclusive, nontransferable, non-assignable, royalty free license to use
and sublicense any New Development that it creates independently or jointly
with a third party; provided, however, that (a) any such use or sublicense
shall be restricted to the New Development and shall not include any other
portion of EnAct and (b) any such sublicenses shall only be to end users.
10.6 Except as expressly permitted in Section 2.9, ▇▇▇▇▇▇▇▇ agrees that
it shall not cause or permit the reverse engineering, reverse assembly or
reverse compilation of the Proprietary Material. ▇▇▇▇▇▇▇▇ agrees not to use,
or to permit others to use, any Proprietary Material for the purpose of
creating, improving or otherwise assisting in the development and/or
marketing of any product which performs functions similar to, or competitive
with, EnAct. ▇▇▇▇▇▇▇▇ shall not disclose the results of any benchmark tests
or other evaluation of the Software to any third party without Xchange's
prior written consent.
10.7 ▇▇▇▇▇▇▇▇ shall notify Xchange promptly of any infringement,
unauthorized possession, disclosure, or use of Xchange's EnAct or any
Proprietary Materials by any Sublicense or other party or any violation of
the confidentiality or Software use provisions included in any Sublicense and
Services Agreement of which ▇▇▇▇▇▇▇▇ is aware. Xchange shall have the right,
in its sole discretion, to proceed against any party, including any
Sublicensee, with respect to any infringement, unauthorized possession,
disclosure, or use of EnAct or any Proprietary Materials and all damages
recovered in such action shall be payable solely to Xchange. ▇▇▇▇▇▇▇▇ shall
fully cooperate with Xchange at no cost to Xchange (except for reasonable out
of pocket costs) in all stages of any such action. Upon the request of
Xchange, ▇▇▇▇▇▇▇▇ will take such reasonable actions as Xchange may request
(including instituting and prosecuting appropriate legal proceedings) to
enforce the provisions of any Sublicense and Services Agreements and to
prevent or remedy any infringement, unauthorized possession, disclosure or
use of EnAct or Xchange's Proprietary Material by a Sublicensee. Xchange
shall bear the costs of any such action by
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▇▇▇▇▇▇▇▇ against any Sublicensee and shall be entitled to any and all damages
collected as a result thereof and such damages shall not act to reduce,
offset or refund any Guaranteed Royalties or Royalty Fees.
10.8 ▇▇▇▇▇▇▇▇ acknowledges that any breach of its obligations with
respect to proprietary rights of Xchange will cause Xchange irreparable
injury for which there are inadequate remedies at law and that Xchange shall
be entitled to equitable relief in addition to all other remedies available
to it.
10.9 ▇▇▇▇▇▇▇▇ understands and agrees that the Software is licensed by
Xchange for use by Sublicensees only in the Territory and that in addition to
the restrictions on the non-transferability of the Software agreed elsewhere
herein, Sublicensees may not move, remove or transmit the Software from such
location. This Agreement and the Software are subject to any and all clauses,
regulations, orders or other restrictions relative to export, re-export, or
redistribution of the Software and its components that may now or in the
future be imposed by the government of the United States or any agency
thereof (including without limitation the U.S. Department of Commerce).
11. NON-SOLICITATION; NON-COMPETITION
11.1 During the Term and for a period of twenty-four (24) months
thereafter, neither party shall recruit or hire any employees of the other
party without the prior written consent of such other party except that
▇▇▇▇▇▇▇▇ may recruit or hire the persons listed on Schedule G hereto. This
shall in no way, however, be construed to restrict, limit or encumber the
rights of any employee granted by law. In the event that all or any of the
persons listed on Schedule G hereto become employees or ▇▇▇▇▇▇▇▇, Xchange
shall have the right to utilize such employees pursuant to a mutually agreed
to consulting agreement to be entered into between the parties. As to former
employees of Xchange that were also employees of Customer Analytics, Inc. or
Action Systems, Inc. prior to becoming employees of Xchange, Xchange agrees
to waive any prohibitions on such former employees accepting employment with
▇▇▇▇▇▇▇▇.
11.2 For the period commencing on the Effective Date and ending on the
later of (i) eighteen (18) months after the Effective Date or (ii) six (6)
months after the end of the Term, ▇▇▇▇▇▇▇▇ shall not market, advertise, sell,
resell, distribute, license, sublicense or otherwise provide or offer to
provide any products or services competitive with EnAct to any user, or
potential user, in the world within or without the Territory. If at any time
the provisions of this Section 11.2 shall be determined to be invalid or
unenforceable, by reason of being vague or unreasonable as to area, duration
or scope of activity, this Section 11.2 shall be considered divisible and
shall become and be immediately amended to only such area, duration and scope
of activity as shall be determined to be reasonable and enforceable by the
court or other body having jurisdiction over the matter; and ▇▇▇▇▇▇▇▇ agrees
that this Section 11.2 as so amended shall be valid and binding as though any
invalid or unenforceable provision had not been included herein.
12. GENERAL
12.1 This Agreement and the Schedules and Exhibits attached hereto set
forth the entire agreement between the parties concerning the subject matter
hereof and supersedes all other agreements or understandings, written or
oral, relating thereto. No representation, promise, inducement or statement
of intention has been made by either party which is not set forth in this
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Agreement and neither shall be bound by or liable for any alleged
representation, promise, inducement or statement of intention not so set
forth. No amendment or modification of this Agreement or any provision hereof
shall be binding upon any party hereto unless made in writing and signed by
the parties.
12.2 This Agreement shall be binding upon, and inure to the benefit of,
the parties and their respective successors, legal representatives, and
permitted assigns; provided, however, that this Agreement is personal to both
▇▇▇▇▇▇▇▇ and Xchange.
12.3 This Agreement may not be assigned, sublicensed or otherwise
transferred by either party to any third party other than as provided herein
without the prior written consent of the other party; provided, however, that
the consent of ▇▇▇▇▇▇▇▇ shall not be required in that event that this
Agreement is assigned by Xchange to a purchaser of all, or substantially, all
its assets or equity. Any attempt by either party to assign, sublicense or
transfer the Software, this Agreement, or any of the rights or duties
contained herein other than as specifically set forth in this Section 12.3
shall be void.
12.4 ▇▇▇▇▇▇▇▇ shall for all purposes hereunder be an independent
contractor. This Agreement is not intended in any way to create the
relationship of employer and employee or principal and agent between Xchange
and ▇▇▇▇▇▇▇▇ and under no circumstances shall ▇▇▇▇▇▇▇▇ be considered an
employee or agent of Xchange. ▇▇▇▇▇▇▇▇ shall have no authority to vary, alter
or enlarge any of Xchange's obligations hereunder or to make representations,
warranties or guarantees on behalf of Xchange. ▇▇▇▇▇▇▇▇ shall make all
agreements with Sublicensees respecting EnAct in its own name and for its own
account and risk, and shall establish its own prices. Nothing in this
Agreement shall be construed to establish a relationship of co-partners or
joint ventures between the parties.
12.5 During the Initial Term and any Renewal Term of this Agreement,
▇▇▇▇▇▇▇▇ shall be a member of the Xchange Alliance program and Xchange shall
provide such management and resources as it, in its sole discretion, deems
adequate to coordinate the relationship of the parties pursuant to this
Agreement. For the Initial Term and any Renewal Term, the CEO or other
officer of Xchange shall provide to ▇▇▇▇▇▇▇▇ a Quarterly briefing regarding
EnAct and any developments related thereto and ▇▇▇▇▇▇▇▇ shall be permitted
one seat on each of Xchange's Executive Advisory Board and Product Advisory
Board.
12.6 No waiver of any default hereunder shall operate as a waiver of any
other default or of a similar default on a future occasion. No waiver of any
term or condition hereof shall be effective unless the same shall be in
writing and signed by an authorized representative of the party waiving such
term or condition. No remedy referred to in this Agreement is intended to be
exclusive, but each shall be cumulative and in addition to any other remedy
referred to herein or otherwise available at law or in equity.
12.7 All notices to be given hereunder shall be in writing and shall be
sent by registered or certified mail, postage prepaid, duly addressed to the
to the Presidents of the respective parties at the addresses on the first
page hereof or to such other address as may be specified by written
notification sent to the other party. All notices shall be effective when
received.
12.8 Neither Xchange nor ▇▇▇▇▇▇▇▇ shall be liable for any delays in their
performance of any of its obligations hereunder due to causes beyond its
reasonable control, including, but not limited
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to, fire, strike, war, riots, acts of any civil or military authority, acts
of God, judicial action, unavailability or shortages of materials or
equipment, failures or delays in delivery of vendors and suppliers or delays
in transportation.
12.9 Each party hereto agrees that it will not make any public disclosure
of the existence of this Agreement, any of its terms or any information
concerning the transactions contemplated herein without the prior consent of
the other party hereto. Notwithstanding the foregoing, no such consent shall
be required in the event that any disclosure is required by applicable law,
rule or regulation; provided, however, that with respect to any press release
required by any rules or regulations of the Securities and Exchange
Commission, the disclosing party shall provide the other party with a copy of
such release within a reasonable time prior to such disclosure.
12.10 This Agreement shall be governed by, and construed and enforced
with, the substantive law of the State of New York. The United Nations
Convention on Contracts for the International Sale of Goods shall not apply
to any of the transactions contemplated by this agreement. Any legal action
brought by either party against the other shall only be brought in a state
court of New York or the U.S. Federal District Court in New York. Distributor
hereby acknowledges, covenants and agrees that Xchange's execution of this
Agreement and any and/or all of Xchange's activities contemplated by this
Agreement shall not constitute, either individually or taken in whole or in
part, submission by Xchange to the jurisdiction of any country or State in
the Territory, as the case may be, or to any court located therein.
12.11 This Agreement may be executed in one or more counterparts each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Execution and delivery of this Agreement by
facsimile transmission shall constitute execution and delivery of this
Agreement for all purposes, with the same force and effect as execution and
delivery of an original manually signed copy hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers or representatives as of the date
first written above.
▇▇▇▇▇▇▇▇ CORPORATION EXCHANGE APPLICATIONS, INC.
Signature: /s/ ▇▇▇▇▇▇ ▇▇▇▇ Signature: /s/ F. ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------- ------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇ Name: F. ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------- ------------------------
Title: Senior Vice President and Title: Chief Strategy Officer
Managing Director
------------------------- ------------------------
Date: March 31, 2001 Date: March 31, 2001
------------------------- ------------------------
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