EXHIBIT 10.32
SOFTWARE MAINTENANCE, SUPPORT
AND ASSIGNMENT AGREEMENT
BY AND BETWEEN
XOX CORPORATION
AND
GEOQUEST,
A DIVISION OF
SCHLUMBERGER TECHNOLOGY CORPORATION
EFFECTIVE AS OF JUNE 1, 1998
TABLE OF CONTENTS
Article I. DEFINITIONS ..................................................1
Article II. RIGHTS TO SOFTWARE ...........................................7
2.01 Rights and Assurances .....................................7
2.02 Consideration .............................................8
Article III. RESALE CREDITS ...............................................9
3.01 Credits ...................................................9
3.02 Resale Payments .... ......................................9
Article IV. MOST FAVORED CUSTOMER STATUS ................................11
4.01 MOST FAVORED TERMS .......................................11
4.02 Determining Most Favored Terms ...........................12
4.03 Irreparable Harm .........................................12
Article V. DELIVERY AND UPDATES ........................................12
5.01 Improvements .............................................12
5.02 Delivery .................................................13
ARTICLE VI. MAINTENANCE .................................................13
6.01 Maintenance Fees .........................................13
6.02 Maintenance Services .....................................14
6.03 Errors ...................................................14
6.04 Response Action ..........................................15
6.05 Conversion to Resale Right ...............................15
Article VII. TECHNOLOGY SUPPORT ..........................................16
7.01 Service Fees and Usage ...................................16
7.02 Future Releases ..........................................17
7.03 Improvements .............................................17
7.04 Conversion to Resale Rights ..............................18
7.05 Pre-Approval .............................................18
7.06 Training .................................................18
7.07 Time Records .............................................18
7.08 Failure to Make Reasonable Efforts .......................18
Article VIII. TERM ........................................................19
8.01 Term .....................................................19
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Article IX. REPRESENTATIONS AND WARRANTIES ..............................19
9.01 XOX Representations ......................................19
Article X. INDEMNITY ...................................................20
10.01 XOX Indemnity ............................................20
10.02 Right to Use .............................................21
Article XI. PROTECTION AND DEFENSE ......................................21
11.01 Maintenance of Conveyed Rights ...........................21
11.02 Enforcement ..............................................22
11.03 Enforcement Damages.......................................22
11.04 Procurement of Patents ...................................22
11.05 Confidentiality ..........................................23
11.06 Hiring Limitations .......................................23
Article XII. INFORMATION EXCHANGE ........................................24
12.01 Protection ...............................................24
12.02 Company Improvements .....................................24
Article XIII. MISCELLANEOUS ...............................................24
13.01 Disclaimer ...............................................24
13.02 Expenses .................................................24
13.03 Integration ..............................................25
13.04 Successors and Assigns ...................................25
13.05 Headings .................................................25
13.06 Counterparts .............................................25
13.07 Severability .............................................25
13.08 No Exclusive Relationship ................................25
13.09 Attorneys Fees ...........................................26
13.10 Notices ..................................................26
13.11 Judicial Proceeding ......................................26
13.12 Arbitration ..............................................26
13.13 Jurisdiction/Choice of Law ...............................26
13.14 Third-Parties ............................................26
13.15 United States Laws .......................................26
13.16 No Joint Venture .........................................27
13.17 All or Any Part of Conveyed Rights .......................27
13.18 No Partition .............................................27
13.19 New Application ..........................................27
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EXHIBITS AND SCHEDULES
Exhibit A - Company Standard Term
Exhibit B - Software
Exhibit C - Training
Exhibit D - Arbitration
Schedule 9.01 (b) - Conveyed Rights
Schedule 9.01 (c) - Claims
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SOFTWARE MAINTENANCE, SUPPORT AND ASSIGNMENT AGREEMENT
THIS SOFTWARE MAINTENANCE, SUPPORT AND ASSIGNMENT AGREEMENT (this
"Agreement"), is effective as of June 1, 1998 (the "Effective Date"), by and
between XOX Corporation, a Delaware corporation (hereinafter "XOX"), and
Geoquest, a division of Schlumberger Technology Corporation, a Texas corporation
(the "Company").
WITNESSETH:
WHEREAS, the Company and XOX each possess equal rights, independent of
one another, to ownership and control of the current version of the Software (as
hereinafter defined), the Company having acquired its rights in the Software as
it exists on the date hereof pursuant to the Assignment Agreement (as
hereinafter defined);
WHEREAS, XOX and the Company desire to vest in the Company co-ownership
of all modifications, enhancements, improvements, alterations or other revisions
to the Software effected, directly or indirectly, by XOX within three years
after the Effective Date;
WHEREAS, the Company desires to secure the services of XOX to maintain,
support and improve the Software and XOX desires to perform such services;
WHEREAS, XOX and the Company further wish to agree on terms for the
transmittal and protection of documentation and information pertaining to the
Software; and
WHEREAS, although the Company is not subject to any transfer restrictions
with respect to software transfers to the Company's Affiliates, the parties
hereto have agreed on certain restrictions on transfers of software (acquired by
the Company from XOX) by the Company to Third-Parties;
NOW THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration and reasonably equivalent value, the
receipt and sufficiency of which the parties hereto hereby acknowledge, the
parties hereto, intending to be legally bound, agree as follows:
ARTICLE I. DEFINITIONS
When used in this Agreement, the capitalized terms listed below shall
have the following meanings:
"Anniversary Date" shall mean the third anniversary of the Effective
Date.
"Affiliates" shall mean any Person controlling, controlled by or under
common control with any other Person. For purposes of this definition "control"
(including "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or otherwise. Without limiting the generality of
the foregoing, for purposes of this Agreement, (A) XOX and all Subsidiaries
thereof shall be deemed to be Affiliates of XOX, and (B) Schlumberger and all
Subsidiaries thereof shall be deemed to be Affiliates of the Company.
"Assignment Agreement" shall mean the Software Assignment Agreement
dated as of June 1, 1998, between XOX and the Company.
"Business" shall mean the principal businesses that the Company and its
Affiliates are engaged in on the Effective Date. Without limiting the generality
of the foregoing, "Business" shall mean at least those lines of business
identified by Schlumberger Ltd. in its annual report on Form 10-K for the year
ended December 31, 1997, as filed with the Securities and Exchange Commission;
provided however, that the term "Business" as used herein shall specifically
exclude the fields of
(A) computer-aided design (CAD) and
(B) medical imaging technology [*].
"Company Confidential Information" shall mean any data or information
(oral or written) now or hereafter (i) existing, conceived, created or obtained
by the Company (but excluding information obtained from XOX), (ii) treated by
the Company as confidential and (iii) identified to XOX by the Company as
confidential. Notwithstanding the foregoing, the Company Confidential
Information will not be deemed to include information that is (A) publicly
available or in the public domain at the time disclosed, (B) or becomes publicly
available or enters the public domain through no fault of XOX, (C) rightfully
communicated to XOX, without restriction, by persons not bound by
confidentiality obligations with respect thereto, (D) already in XOX's
possession free of any confidentiality obligations with respect thereto at the
time of disclosure, (E) independently developed by XOX, or (F) approved by the
Company for release or disclosure without restriction; provided XOX shall have
the burden of proving the application of the foregoing exceptions by written
documentation.
"Company Intellectual Property" shall mean any improvement, derivative
work, enhancement, modification, alteration, data, data structure, information,
conception, technical information or trade secret which emanates after the
Effective Date directly or indirectly from the Company (but excluding XOX
Intellectual Property), including, but not limited to, information in any form
and in any media, conversations, discussions or descriptions which (i) relate to
the Business, Conveyed Rights or Software and (ii) the Company deems proprietary
or confidential, whether or not protectable by patent, copyright, trade secret,
mask work rights or SUI GENERIS laws.
[*] Confidential portion has been omitted and filed separately with the
Securities and Exchange Commission.
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"Company Standard Terms" shall mean the Company's standard terms and
conditions for license or sublicense of the Company's proprietary interest in
software to Third-Parties, as such standard terms and conditions are then in
effect. By way of illustration, and not limitation, the Company Standard Terms
as of the Effective Date are set forth in Exhibit A. The Company Standard Terms
shall contain reasonable restrictions to protect the confidentiality of the XOX
Confidential Information and the copyrights in the XOX Intellectual Property.
"Confidential Information" shall mean XOX Confidential Information and
Company Confidential Information.
"Conveyed Rights" shall mean an undivided interest as a co-owner with XOX
of all right, title, and interest of XOX in the XOX Intellectual Property
existing, developed, conceived, invented, arising, acquired or created by XOX
after the Effective Date and before the Anniversary Date. The Conveyed Rights
shall also include an unrestricted, nonexclusive, royalty-free transferable
license solely for use by the Company and its Affiliates to any part of the
Development Environment for the XOX Intellectual Property owned by XOX after the
Effective Date and before the Anniversary Date. Notwithstanding any provision of
this Agreement to the contrary, the Conveyed Rights shall exclude any
Third-Party Software incorporated or embodied in, or compiled or combined with,
the XOX Intellectual Property and the Development Environment and shall also
exclude any software not owned by XOX or whose rights are not transferable by
XOX. All Conveyed Rights shall be subject to the terms and conditions of this
Agreement.
"Development Environment" shall mean any Documentation, programming,
media, and other objects which XOX acquires ownership of after the Effective
Date and before the Anniversary Date, including assemblers, compilers,
workbenches, tools, and higher-level or proprietary languages, used, owned or
developed by XOX after the Effective Date and before the Anniversary Date for
the development, maintenance, and implementation of the Software, to the extent
such objects may be practically required by the Company or its assigns for any
subsequent maintenance or enhancement of the same, similar, or related
programming, development of other programming relating to the Software in the
course of the Business or the comprehension by a skilled technician of the
operation of such Software.
"Disposition" shall mean a license, sublicense or lease of the Software
(in Object Code only), to a Third Party in a Value Added transaction by the
Company, any Affiliates of the Company, or by any Third Party authorized to make
the Disposition by the Company or its Affiliate.
"Documentation" shall mean any support material related to the Software
on any tangible media, which XOX acquires ownership of after the Effective Date
and before the Anniversary Date including, without limitation, the
documentation, instructions, training materials, materials useful for design
(for example, logic manuals, flow charts, and principles of operation), and
other written materials or tangible items, electronic media, electronic mail
messages, statements of principles of operation, schematics, pertinent
commentary and explanations and any fixed General Know-How. The Documentation
shall also include, without limitation, all existing and future derivative
works,
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innovations, improvements, enhancements, modifications, substitutions or
replacements of the foregoing, which XOX owns or acquires ownership of after the
Effective Date and before the Anniversary Date, whether (i) developed by or for
XOX, (ii) XOX learns of or has knowledge of and is entitled to use or license to
others, (iii) acquired by or for XOX after the date hereof or (iv) made through
any joint venture, partnership, XCIX Affiliate, development agreement or other
arrangement that involves XOX and the Conveyed Rights which are in existence
after the Effective Date and before the Anniversary Date.
"Effective Date" shall have the meaning first set forth therefor
hereinabove.
"General Know-How" shall mean any ideas, concepts, know-how, data,
methods, techniques, processes, skills, tools, libraries, and adaptations
pertaining to the Software which XOX acquires ownership of after the Effective
Date and before the Anniversary Date, including generalized features of the
sequence, structure, and organization of the Software, whether or not deemed
proprietary or secret which are in existence after the Effective Date and before
the Anniversary Date.
"Material Programming Error" shall mean the inability of the Software to
perform the functions established for the Software in XOX's published
specifications.
"Object Code" shall mean the machine-readable form of the Software.
"Operation Error" shall mean the failure of the Software to conform to
the operations and specifications in the Documentation.
"Person" shall mean any individual, person, firm, corporation,
partnership (limited or general), joint venture, association, trust,
unincorporated organization, limited liability company, governmental authority
or any other form of entity.
"Priority One Need" shall mean (i) the Software is not operational, (ii)
the existence of a Material Programming Error or (iii) the operation of the
Software detrimentally impacts the Business.
"Priority Two Need" shall mean the Software is operational but
functionally unacceptable, including, but not limited to, delays in response
time, system errors and other non-critical malfunctions.
"Priority Three Need" shall mean a need identified by the Company
(related to deficiencies in the Software) for changes and enhancements.
"Resale Right" shall mean an irrevocable credit for an amount paid, which
credit entitles the Company to one right to transfer the Software, or any part
thereof, under a license or lease to any Third-Party in a Value Added
transaction, and which right may be carried over indefinitely from year to year
until used in accordance with the terms of this Agreement.
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"Schlumberger" shall mean Schlumberger Limited, a Netherlands Antilles
corporation.
"SHAPES" shall have the meaning set forth therefor on Exhibit B attached
hereto.
"Software" shall mean all derivative works, innovations, improvements,
enhancements, modifications and upgrades of the software identified in Exhibit B
hereto, including SHAPES and all associated computer programming codes
(including both Object Code and Source Code versions thereof) which XOX obtains
ownership of after the Effective Date and on or before the Anniversary Date and
which (i) is developed by or for XOX after the Effective Date and on or before
the Anniversary Date, (ii) XOX learns or has knowledge of after the Effective
Date and before the Anniversary Date, and is entitled to use or license to
others, (iii) is acquired by or for XOX after the Effective Date and before the
Anniversary Date, or (iv) is made after the Effective Date and before the
Anniversary Date, through any joint venture, partnership, XOX Affiliate,
development agreement or other arrangement that involves XOX and the Conveyed
Rights and that relates to any business substantially the same as the Company's
Business; except that the term "Software" shall exclude the fields of
(A) computer-aided design (CAD) and
(B) medical technology other [*].
"Software Disposition" shall mean any Disposition of a main application,
of Software listed in the Company's price book that allows one single user to
use, or one concurrent allowance of use in a multiuser installation, of the
Software; provide however, that (i) each allowed concurrent use as described
above of the Software constitutes one Software Disposition; and (ii) a Software
Disposition shall not include the Disposition by the Company of any optional
modules which may be added on to such main application and which access the
Software in the main application and where the optional module does not directly
contain the Software.
"Source Code" shall mean the human readable form of the Software,
including all comments and any procedural code such as job control language.
"Subsidiary" of any Person shall mean any corporation or other Person
(whether now existing or hereafter created) of which at least 50% of the issued
and outstanding securities having voting power for the election of directors or
other equivalent managers of any Person, or at least 50% of the beneficial
ownership interest, is now or hereafter owned or controlled, directly or
indirectly, by any such Person; provided that the voting power and ownership of
such Person and all of its Subsidiaries shall be aggregated together to
determine whether a Person is a Subsidiary.
"Third-Party" shall mean, with respect to any Person for which status as
a "Third-Party" is to be determined, that (i) such Person is not an Affiliate of
any other Person that is a party to the transaction or event for which status as
a "Third-Party" is to be determined, and (ii) such Person
[*] Confidential portion has been omitted and filed separately with the
Securities and Exchange Commission.
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would constitute a bona fide purchaser for value were such Person to be
purchasing goods from any other Person party to the transaction or event for
which "Third-Party" status is to be determined.
"Third-Party Software" shall mean software or technology in which any
Person or entity hereafter has any lawful right, title, or interest superior to
XOX, including any restrictions or obligations (including obligations to obtain
consents or approvals, and restrictions that may be eliminated only by obtaining
consents or approvals) applicable to the Conveyed Rights.
"Updates" shall have the meaning set forth therefor in Section 5.01
hereof.
"Value Added" shall mean the inclusion by the Company of the Conveyed
Rights, in binary non-linkable form that is not directly accessible to the users
of the Value Added software, in other software prepared, assembled, acquired,
written or compiled by the Company and licensed, sublicensed, or leased by the
Company, which shall constitute per se a "Value Added" transaction. Value Added
software shall not be usable as a programming tool to develop new geometric
modeling applications. All Software shall only be embedded in Value Added
software.
"XOX Confidential Information" shall mean any data or information (oral or
written) (i) owned, conceived, created or obtained by XOX, (ii) treated by XOX
as confidential and (iii) that relates to the Software and which is in existence
after the Effective Date and before the Anniversary Date. XOX Confidential
Information shall be deemed to include, without limitation, the Source Code and
the Development Environment.
"XOX Copyright(s)" shall mean all copyright interests in the Software or
Documentation which XOX acquires ownership of after the Effective Date and
before the Anniversary Date, including, without limitation, all common-law
rights, moral rights and all rights to register and obtain renewals and
extensions of copyright registrations, together with all other copyright
interests accruing by reason of international copyright convention, and the
right to ▇▇▇ for past, present, or future infringement and to collect and retain
all damages and profits therefor.
"XOX Intellectual Property" shall include, without limitation, any
proprietary right of XOX in the Software, XOX Patent Rights, XOX Copyrights, XOX
Confidential Information or other proprietary rights of XOX in the Software or
Documentation which XOX acquires after the Effective Date and before the
Anniversary Date, whether or not protectable by patent, trade secret, copyright,
mask work right or SUI GENERIS rights and whether or not fixed in a tangible
medium of expression, but shall exclude Company Intellectual Property. For the
avoidance of doubt, it is the intent hereof that XOX Intellectual Property
include all proprietary rights of XOX in the Software and/or Documentation,
throughout the universe, arising after the Effective Date and before the
Anniversary Date.
"XOX Patent Right" shall mean any patent or patent application which XOX
acquires ownership of after the Effective Date and before the Anniversary Date
under which the Company's
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use or proposed use of the Software would otherwise constitute patent
infringement; including, without limitation, all continuations,
continuations-in-part, divisions, reissues, renewals and extensions thereof,
together with all patent interests accruing by reason of international treaty or
convention, and the right to ▇▇▇ for past, present, or future infringement and
to collect and retain all damages and profits therefor.
"Year 2000 Compliant" shall mean (i) the use of the Software on or after
January 1, 2000, February 29, 2000 or September 9, 1999 will not adversely
affect the performance of the Software, (ii) the advent of the dates September
9, 1999, January 1, 2000, and February 29, 2000, will not adversely affect the
ability of the Software to process accurately, without any errors or omissions,
date/time data and date dependent data, and (iii) the Software shall calculate,
compare, compute and sequence, from, into and between the 20th and 21st
centuries, and the years 1999 and 2000, leap year calculations and calculations
involving the date September 9, 1999.
ARTICLE II. RIGHTS TO SOFTWARE
2.01 Rights and Assurances. (a) Subject to the provisions of the
Assignment Agreement (including, without limiting the generality of the
foregoing, Section 2.01(d) thereof) and Section 2.01(d) of this Agreement, XOX
and the Company have each agreed, from and after the Effective Date, that, in
consideration of the fee paid by the Company pursuant to Section 2.02(a) below,
XOX now hereby conveys, delivers, sells, transfers, and assigns to the Company
ownership of all of the Conveyed Rights, including those Conveyed Rights arising
as a result of any joint venture, partnership, XOX Affiliate, development
agreement or other arrangement that involves XOX and the Conveyed Rights after
the Effective Date and before the Anniversary Date, and the Company hereby
accepts such conveyance, such that from and after the Effective Date, pursuant
to the foregoing, XOX and the Company shall each possess and own independently,
all of the rights to and ownership of the Conveyed Rights including, without
limiting the generality of the foregoing, equal and independent rights to use,
own, license, sublicense, lease, distribute, produce, reproduce, display,
modify, enhance, improve or alter the Conveyed Rights, to prepare derivative
works based on the Software, and to authorize Third Parties, and to license to
Third Parties the right, to do some or all of the foregoing, subject only to the
terms and conditions hereof. Each of XOX and the Company shall be entitled,
without any obligation of accounting or any obligation to compensate any Person
(including each other), except as otherwise as expressly set forth herein, to
exercise all of the foregoing rights, including, without limiting the generality
of the foregoing, the rights of ownership, control, possession, enforcement
(subject to Section 11.02 hereof), use, modification, enhancement, improvement,
license, sublicense, lease, distribution, production, reproduction, display,
alteration, preparation of derivative works, alienation, and authorization of
Third Parties to do any of the foregoing; provided however, that such rights of
the Company of ownership, control, possession, enforcement, use, modification,
enhancement, improvement, license, sublicense, lease, distribution, production,
reproduction, display, alteration, preparation of derivative works, alienation
and authorization of Third Parties to do any of the foregoing, shall be limited
solely to the Business.
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(b) Without limiting the generality of the foregoing, XOX and the Company
have agreed that all rights set forth in this Section 2.01 hereof shall become
effective upon the Effective Date including the right to modify, enhance,
improve and evolve the Software.
(c) The Company shall have the unrestricted right or ability to dispose
of, license, sublicense, sell, assign or otherwise transfer to any Affiliate or
Affiliates of the Company of any or all of its rights (including without
limitation the Conveyed Rights or any part thereof) acquired hereunder, all
without obligation for, use of or requirement or need for, any payment,
accounting, liability, obligation or compensation of any kind to (including,
without limitation, the use or purchase of any Resale Right from) XOX.
(d) Except as otherwise expressly set forth herein, the Company may only
license, sublicense, or lease the Conveyed Rights, or any part thereof, to Third
Parties and only (i) for use in the areas of the Business, (ii) in a Value Added
context, and (iii) pursuant in all material respects to the Company's Standard
Terms. It is agreed and understood that Company may not disclose, transfer,
sell, assign, lease, license or otherwise convey any portion of the Source Code,
Development Environment or Documentation to a Third Party, [*].
(e) XOX and the Company each agrees to execute and deliver such further
instruments, and take such further actions, as may be reasonably requested by
the other party in order to evidence more fully the conveyance of the Conveyed
Rights in favor of the Company hereunder and the other conveyances described
hereinabove and the rights retained by XOX, including, without limitation, such
instruments related to the Company's and XOX's rights to and ownership interest
in XOX Patent Rights and XOX Copyrights, so that the Company's and XOX's rights
to and ownership interests in such Conveyed Rights shall be maintained as a
matter of record in the appropriate United States and applicable foreign
governmental offices; provided that such further instruments and actions shall
not, unless otherwise agreed, require either party to incur any obligation in
addition to the obligations undertaken or assumed elsewhere in this Agreement.
The occurrence of the Anniversary Date shall not limit any party's obligations
under this Section 2.01(e), or the ownership rights hereafter arising or
required to be conveyed in accordance with the terms hereof.
2.02 Consideration. (a) In consideration of the conveyance by XOX to the
Company of all of the Conveyed Rights and the Resale Rights as hereinafter
provided, the Company shall pay to XOX, in equal monthly installments on the
first business day of each month [*]
[*] Confidential portion has been omitted and filed separately with the
Securities and Exchange Commission.
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[*]. The Company shall be unconditionally obligated to make each of these
payments on time, without regard as to whether the Company uses any of the
Resale Rights, and even if XOX fails to perform its support and maintenance
obligations. No payment shall be subject to any offset because of any claim
against XOX by the Company or any right to payment from XOX, except to the
extent that the Company is entitled to indemnification from XOX pursuant hereto
and XOX is unable or refuses to pay such indemnification obligations to the
Company.
(b) Reference is hereby made to Section 3.02 hereof for a description of
the payment obligations of the Company arising under the circumstances
contemplated in Section 3.02.
ARTICLE III. RESALE CREDITS
3.01 Credits. The Company shall be entitled to and shall be deemed to
have received the number of Resale Rights as provided for in the following table
for each [*] indicated (such receipt to be deemed to have occurred on the first
day [*]:
[*] NUMBER OF
PERIOD RESALE RIGHTS
[*] [*]
The Company shall carry over from year to year all Resale Rights not
consumed in any [*] in accordance with Section 3.02. Resale Rights are
non-refundable and are not convertible into other services or rights under other
products.
3.02 Resale Payments.
(a) For each Software Disposition from and after the Effective Date, the
Company's Resale Rights shall decrease by one (1). A separate Resale Right shall
be required for each Software Disposition. No fee, accounting or Resale Right
shall be due from the Company to XOX on account of any Software Disposition:
(i) to any Person that is an Affiliate of the Company; or
[*] Confidential portion has been omitted and filed separately with the
Securities and Exchange Commission.
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(ii) to any Third-Party end-user that has rights to use the Software in
the Business which do not obligate such end-user to make additional payments to
XOX for additional use of the Software; or
(iii) which is an evolution, improvement, modification, correction,
enhancement, maintenance, upgrade, or bug fix of a previous Software
Distribution for which the Company purchased a Resale Right.
In the event that the Company does not possess any Resale Rights at the
time of a Software Disposition to a Third-Party as described above, the Company
shall contemporaneously purchase from and pay to XOX the consideration set forth
below for an additional Resale Right, which shall be deemed immediately applied
to such Software Disposition upon payment to XOX therefor, by payment to XOX
according to the following table:
[*] COST PER RESALE RIGHT
[*] [*]
(b) Each Resale Right, if not used during any one twelve month period
that commences June 1, may be carried over indefinitely from year to year until
used in accordance with the terms hereof in connection with a Disposition of the
Software by the Company to a Third-Party.
(c) The Company shall submit written resale reports ("Resale Reports") to
XOX at the end of each six month period following the Effective Date. Each
Resale Report shall state the number of Software Dispositions which the Company
has made during the period. The Company shall keep records sufficient to provide
XOX's auditors with a record of the actual number of Software Dispositions made
by Company during the period covered by a Resale Report so that XOX's auditors
may determine the correctness of the figures given in Company's Resale Report.
(d) The Company shall keep and maintain for three years after the date of
each Resale Report business and technical records sufficient to allow
independent verification of the accuracy of each Resale Report.
(e) XOX shall have the right to audit Company's compliance with any of
the provisions of this Section 3.02 no more frequently than once each calendar
year to determine (a) the number of Software Dispositions which require a Resale
right, and (b) the total amount of Resale Credits used by Company in the
preceding two calendar years. The audit shall be performed only by an accounting
firm of recognized national standing selected by XOX and reasonably acceptable
to Company. The
[*] Confidential portion has been omitted and filed separately with the
Securities and Exchange Commission.
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audit shall detail the number of Software Dispositions which require a Resale
right, and the total amount of Resale Credits used by Company in the preceding
calendar year. Any additional amounts owed by Company as a result of the audit
report shall be paid with interest at the rate of 10% per annurn (accrued from
the date a payment would have been due but for the Company's error) within
thirty days of written notice by XOX of such amount due, such written notice to
be effective only if sent by XOX to Company within 180 days after such audit
report is delivered to XOX by the auditors that authored it. Payment by the
Company to XOX may be made in Resale Rights then currently available for use by
the Company, using Resale Rights as currency (with such Resale Rights valued at
the cost per right set forth in Section 3.02(a)), and no cash payment shall be
due from the Company to XOX if the Company has Resale Rights with which to pay.
If any annual Resale Report is discovered to have underreported the correct
number of Software Dispositions by more than 10%, the Company shall pay the full
cost of the audit.
ARTICLE IV. MOST FAVORED CUSTOMER STATUS
4.01 MOST FAVORED TERMS. (A) UNTIL THE END OF MAY 31, 2001, XOX AGREES
TO TREAT THE COMPANY AS ITS MOST FAVORED CUSTOMER. UNDER NO CIRCUMSTANCES
WHATSOEVER SHALL XOX LICENSE, LEASE OR SELL THE SOURCE CODE TO ANY THIRD-PARTY
THAT IS A DIRECT OR INDIRECT COMPETITOR OF THE COMPANY IN THE COMPANY'S BUSINESS
OR ALLOW ANY SUCH THIRD-PARTY (DIRECTLY OR INDIRECTLY) ACCESS TO THE SOURCE CODE
(EXCEPTING WHERE SUCH ACCESS IS REQUIRED UNDER A SOURCE CODE ESCROW, VAULTING
AGREEMENT, OR SECURITY AGREEMENT CREATED FOR THE SAME PURPOSE AS A SOURCE CODE
ESCROW OR VAULTING AGREEMENT), UPON ANY TERMS OR CONDITIONS MORE FAVORABLE THAN
THE COMBINED TERMS AND CONDITIONS UPON WHICH THE COMPANY ACQUIRED OWNERSHIP IN
THE SOURCE CODE EXISTING HERETOFORE AND OWNERSHIP IN THE CONVEYED RIGHTS
DEVELOPED, INVENTED, CONCEIVED OR ACQUIRED OR MADE THROUGH ANY JOINT VENTURE,
PARTNERSHIP, XOX AFFILIATE, DEVELOPMENT AGREEMENT OR OTHER ARRANGEMENT THAT
INVOLVES XOX AND THE CONVEYED RIGHTS (OR ANY PART THEREOF) AFTER THE EFFECTIVE
DATE AND BEFORE THE ANNIVERSARY DATE; PROVIDED HOWEVER, THAT XOX MAY PROVIDE THE
SOURCE CODE TO ANY SUCH THIRD-PARTY OR ALLOW ANY SUCH THIRD-PARTY ACCESS TO THE
SOURCE CODE OR LICENSING AND SUBLICENSING RIGHTS DESCRIBED ABOVE, IN EXCHANGE
FOR PAYMENT IN CASH OF AN AMOUNT THAT WOULD BE NO LESS THAN THE AGGREGATE
CONSIDERATION REMAINING TO BE PAID BY THE COMPANY TO XOX AS CALCULATED UNDER
SECTION 4.02 HEREOF.
(B) IN ACCORDING SUCH MOST FAVORED TREATMENT, XOX AGREES NOT TO REASSIGN
ANY STAFF ASSIGNED TO COMPANY PROJECTS TO OTHER PROJECTS
11
WITHOUT FIRST CONSULTING WITH COMPANY, IT BEING THE INTENTION OF THE PARTIES
THAT CHANGES IN XOX STAFF ASSIGNMENT SHALL NOT UNREASONABLY AFFECT THE
SATISFACTORY COMPLETION OF COMPANY PROJECTS. XOX SHALL PROMPTLY PROVIDE TO THE
COMPANY FROM TIME TO TIME REASONABLE INFORMATION REGARDING ANY DISPOSITION
AGREEMENTS THAT INVOLVE SOURCE CODE WHICH INVOLVE AGGREGATE COSTS TO THE
ACQUIRER THAT ARE LESS THAN THE TOTAL COSTS (TAKING INTO ACCOUNT ALL OF THE
TERMS, CONDITIONS AND PAYMENTS, INCLUDING MAINTENANCE AND SUPPORT PAYMENTS,
PROVIDED FOR HEREIN) PROVIDED FOR HEREIN TO BE PAID BY THE COMPANY.
4.02 Determining Most Favored Terms. In order to determine whether the
Company is being accorded most favored customer status under Section 4.01
hereof, the total consideration for each Disposition of the Source Code, and
each grant of licensing and sublicensing authority with respect thereto, shall
be measured against the sum of the consideration then remaining to be paid by
the Company to acquire its rights existing heretofore and its rights in the
Conveyed Rights or any part thereof developed, invented, conceived or acquired
or made through any joint venture, partnership, XOX Affiliate, development
agreement or other arrangement that involves XOX and the Source Code or any part
thereof after the Effective Date.
4.03 Irreparable Harm. XOX acknowledges that any breach of Section 4.01
would subject the Company to irreparable harm and that the Company shall be
entitled to seek an injunction to enforce such provisions. In addition, Company
shall be entitled to seek recovery for any monetary damages it may also suffer
as a result of XOX's breach of the foregoing warranties and representations or
any other provision of this Agreement in accordance with the provisions of
Section 13.12 hereof. The remedies herein shall be in addition to, and not
exclusive of, any other remedies to which the Company shall be entitled,
including damages.
ARTICLE V. DELIVERY AND UPDATES
5.01 Improvements. From the Effective Date until the Anniversary Date,
XOX shall deliver to the Company a written report that completely details any
evolution, improvement, modification, correction, enhancement or other change
(collectively, "Updates") in or to the Software owned (or co-owned with any
other Person) by XOX, XOX development efforts related to Software and the
progress of XOX development efforts related to Software (whether or not such
efforts or Updates have been incorporated into the Software). Except as set
forth in the next succeeding sentence, in the event XOX, either by itself or
through any joint venture, partnership, XOX affiliate, development agreement or
other arrangement that involves the Conveyed Rights or any part thereof,
develops or conceives any Update from the Effective Date until the Anniversary
Date which XOX believes may
page 12
be entitled to patent protection and which is owned by XOX, XOX shall provide to
the Company a written description of such Update at least twenty (20) days prior
to the date of any act, occurrence or deadline date that would constitute a bar
to the patentability of such Update under the laws of the United States or any
foreign jurisdiction, so as to allow the Company an opportunity to review such
written description following receipt thereof in order to determine whether the
Company desires to seek patent protection for the Update. Anything contained in
this Agreement to the contrary notwithstanding, (i) any Update created by XOX
while performing services as a consultant under contract to any Third-Party
(other than the Company) shall not be subject to the rights of the Company, nor
shall the Company be entitled to any conveyance thereto by XOX of any interest
therein, if such contract provides that XOX shall have no right, title to or
interest of any kind in any software, code, Updates or other intellectual
property of any kind (including any partnership agreement, joint venture
agreement or development agreement of any kind), created by XOX pursuant to such
contract, and (ii) XOX shall not enter into any agreement with any Third Party
(other than the Company) for the creation or development of any Updates unless
such contract either (A) grants to XOX ownership or co-ownership thereof and the
right to convey interests therein, including joint ownership, to the Company, or
(B) denies XOX any interest, legal or equitable, in such software, code, Updates
or other intellectual property as created or developed by XOX pursuant to such
contract.
5.02 Delivery. From the Effective Date until the Anniversary Date, XOX
shall deliver to the Company within 30 days after the last day of each calendar
quarter of the Company, at such location as the Company may request, a master
copy of any Conveyed Rights, or any other relevant documentation or media that
evidences or supports any Conveyed Rights, including both Object Code and Source
Code forms of programming, any Documentation, and any design or development
specifications pertaining thereto, if any, and any Updates, as then existing, or
such portion thereof as the Company may request. It is the intent of this
Section 5.02 that, subject to Section 5.01, the Company be entitled to obtain
in a timely fashion possession and joint ownership with XOX of all of the
Documentation, Source Code or media that evidence or support any and all of
Updates, as appropriate to the Company's exercise of its rights hereunder, and
regardless of whether such Updates were (A) developed by or for XOX, (B) XOX
learned of or has knowledge of and is entitled to use or license to others, (C)
was acquired by or for XOX or (D) were made through any joint venture,
partnership, XOX affiliate, development agreement or other arrangement that
involves the Conveyed Rights or any part thereof.
ARTICLE VI. MAINTENANCE
6.01 Maintenance Fees. The Company shall purchase from XOX maintenance
services during [*], and XOX shall supply to the Company such amount of
maintenance services (including without limitation debugging of the Conveyed
Rights, or any part thereof, and the Software) as the Company may reasonably
require. The
[*] Confidential portion has been omitted and filed separately with the
Securities and Exchange Commission.
13
Company shall pay XOX, [*] period of maintenance services, an aggregate annual
maintenance fee [*]; provided, in the event that the Company converts into
Resale Rights XOX's maintenance services as provided for herein, each
maintenance payment made subsequent to such conversion shall be deemed the
purchase of Resale Rights as provided for in Section 6.05. For each twelve-month
period in which the Company shall purchase maintenance services hereunder, the
Company shall pay XOX in equal monthly installments, each such installment being
in an amount equal to [*]. Such monthly installments shall be due on the first
business day of each calendar month beginning after the Effective Date. The
aggregate annual maintenance fee paid by the Company to XOX is a fixed fee, and
shall not vary with or be affected by the amount of maintenance services
actually used or needed by the Company. ALL MAINTENANCE PAYMENTS AS PROVIDED FOR
HEREIN MUST BE FULLY AND TIMELY PAID, WHETHER THE COMPANY REQUESTS ANY OF THE
MAINTENANCE SERVICES.
(b) XOX shall be entitled to reimbursement of its reasonable
out-of-pocket costs and expenses in performing the Maintenance Services, such as
for travel and lodging of XOX personnel when providing Maintenance Services at a
Company designated site, provided that XOX has received prior written approval
from an authorized representative of Company to incur such costs and expenses.
No advanced approval shall be required for telephone toll calls. For the
avoidance of doubt, "out-of-pocket costs and expenses" shall not include XOX's
overhead or personnel costs in providing the Maintenance Services.
6.02 Maintenance Services. Maintenance services shall consist of eight
hour a day, five day a week, fifty-two weeks a year technical support through a
telephone hot line; a customer support bulletin board system available through
dial-up access; and on-site maintenance and assistance necessary to correct any
Material Programming Error or Operating Error.
6.03 Errors. If the Company discovers any Material Programming Errors or
Operation Errors in the Software, the Company shall identify the errors to XOX
for corrective action. The Company shall cooperate with XOX in the correction of
any Material Programming Errors or Operational Errors. XOX shall use reasonable
efforts to respond to errors identified by and/or inquiries from the Company as
promptly as XOX is able to. For purposes of this Section 6.03, "respond" means
to provide a plan as to XOX's proposed course of action for resolving the
problem and details as to how XOX proposes to correct the problem.
6.04 Response Action. XOX shall perform the following actions in response
to the Company's technical support inquiries:
(a) In response to a Priority One Need, XOX shall use reasonable
efforts to (i) assign such personnel as may be necessary to correct such
errors as quickly as is possible, and (ii) provide to the Company with
respect to each bug or error reported to XOX which
[*] Confidential portion has been omitted and filed separately with the
Securities and Exchange Commission.
14
is not corrected within seven calendar days after receipt of such inquiry
(i) a report as to the name of the employee(s) of XOX who is/are
responsible for making the correction and the date the correction is
expected to be completed, and (ii) (if the correction may take longer
than seven calendar days from the date of such inquiry) instructions as
to ways of allowing use of the Software pending correction of the error
or bug.
(b) In response to a Priority Two Need, XOX shall use reasonable
efforts to (i) assign such personnel as may be necessary to correct such
errors on an expedited basis, and (ii) provide to the Company with
respect to each bug or error reported to XOX which is not corrected
within 30 calendar days after receipt of such inquiry (A) a report as to
the name of the employee(s) of XOX who is/are responsible for making the
correction and the date the correction is expected to be completed, and
(B) (if the correction may take longer than one month from the date of
such inquiry) instructions as to ways of allowing use of the Software
pending correction of the error or bug.
(c) In response to a Priority Three Need, XOX shall use reasonable
efforts to provide a written response to the Company promptly after
receipt of such inquiry, and the Company and XOX shall negotiate in good
faith concerning which of the next scheduled regular releases of the
Software will resolve the Priority Three Need.
6.05 Conversion to Resale Right. On or after [*], the Company
may elect, in the Company's sole discretion, to convert into Resale Rights all
then remaining maintenance obligations of XOX as would be due under this Article
6 in all calendar months (for the duration of such maintenance payment
obligations) succeeding the date on which notice of conversion is sent by the
Company to XOX. The Company may effect such conversion by sending written notice
of such conversion to XOX; and notice shall be effective for all maintenance
obligations arising 30 days after the date such notice is sent to XOX by the
Company. Upon sending of such notice by the Company, (i) XOX's maintenance
obligations for maintenance under this Article VI arising in all succeeding
calendar months, occurring 30 days after the date such notice is sent, shall be
terminated, (ii) the Company shall pay monthly following the date such notice is
given as if the Company were paying for maintenance obligations under this
Article VI, and (iii) the Company shall receive each month commencing on the
first business day of the calendar month that occurs after the expiration of 30
days from the date such notice is sent by the Company, a number of whole
additional Resale Rights determined by dividing (A) the Company's monthly
payment due on such date and determined in accordance with Section 6.1 hereof,
by (B) [*]. Fractions of a Resale Right (if any) arising under the foregoing
shall always be rounded upward to the nearest whole Resale Right. Once the
Company has exercised its right to convert XOX's maintenance obligations into
Resale Rights under this Section 6.05, it may not re-convert such Resale Rights
back to rights to maintenance.
[*] Confidential portion has been omitted and filed separately with the
Securities and Exchange Commission.
15
ARTICLE VII. TECHNOLOGY SUPPORT
7.01 Service Fees and Usage (a) The Company shall purchase from [*] of
support services during the [*] period from [*] through [*] and [*] of support
services for the [*] period [*] through [*]. The parties hereto have agreed that
[*] of services is equal to [*] hours of support services. The Company shall pay
XOX an annual support service fee of [*] for each man year of support services
purchased (prorated where applicable as hereinafter provided); provided, in the
event that the Company converts XOX's support services as provided for herein,
each support service payment made subsequent to such conversion shall be deemed
the purchase of Resale Rights as provided in Section 7.04. The Company shall pay
for support services hereunder by monthly installments due on the first business
day of each month. Payments for support services shall be due monthly commencing
June 1, 1998. The amount paid per calendar month shall vary from [*] period to
[*] period, but within each twelve-month period the monthly installments shall
be equal amounts, each such monthly installment being in an amount equal to the
product obtained by multiplying (a) [*] by (b) the total number of man years of
support services to be purchased for such [*] period, and by (c) [*] (it being
understood that the total payments for four man years of support services under
this Section 7.01 is [*]). ALL SUPPORT PAYMENTS AS PROVIDED FOR HEREIN MUST BE
FULLY AND TIMELY PAID WITHOUT REGARD TO WHETHER OR NOT THE COMPANY REQUESTS ANY
OF THE SUPPORT SERVICES.
(b) Subject to Company's right to convert support services to Resale
Rights as set forth in Section 7.04, below, in the event that the Company does
not use all of the man hours of support services purchased by it from XOX in any
[*] period, such man hours shall be deemed carried over and available for use by
the Company without payment of any additional fee therefor to XOX, and such man
hours shall be made available by XOX to the Company, in the next succeeding [*]
period; provided, however, that (i) Company may not carry over any unused
support services after [*] which it has not elected to convert to Resale Rights
in accordance with Section 7.04, below, and (ii) support services that are
unused during the [*] period commencing [*], and which services remain unused
during such [*] period, may be converted into Resale Rights in accordance with
Section 7.04 hereof.
(c) XOX shall be entitled to reimbursement of its reasonable
out-of-pocket costs and expenses in performing the support services, such as for
travel and lodging of XOX personnel when providing support services at a Company
designated site, provided that XOX has received prior written approval from an
authorized representative of Company to incur such costs and expenses. No
advance approval shall be required for telephone toll calls. For the avoidance
of doubt, "out-of pocket costs and expenses" shall not include XOX's overhead or
personnel costs in providing the support services.
[*] Confidential portion has been omitted and filed separately with the
Securities and Exchange Commission.
16
(d) In the event Company requests support services in excess of the
maximums specified in Section 7.01 (a), XOX shall perform such support services
at a cost of [*] per [*]. XOX shall invoice Company for all such support
services and Company shall pay an undisputed invoice within thirty (30) days of
its receipt by Company.
7.02 Future Releases. XOX shall use reasonable efforts to develop future
releases of and improvements to the Software. XOX shall qualify and check for
compatibility with a demonstration unit all future releases of the Software. XOX
shall supply to the Company with each future release a set of regression tests
which exercise the Software and indicate the proper operation of the Software.
Delivery of a release of the Software shall be deemed to have occurred on the
successful completion of an acceptance test. This test includes the ability to
rebuild executables from the named libraries on Exhibit B and to successfully
execute the supplied regression tests with results identical to those obtained
by XOX. Pending mutually agreeable alternatives, the development environments to
be supported are Solaris SparcCompilers, SGI C and C++ compilers and linker,
and MicroSoft VC/C++ DeveloperStudio, respectively, for Sun solaris, SGI Irix,
and PC NT platforms. Any XOX-developed compilation and linkage executables
required to use off the shelf development environments to compile and link the
elements in the source tree into the above libraries shall be provided by XOX
for each platform promptly upon request by the Company.
7.03 Improvements. (a) Notwithstanding and in addition to the Company's
interest in the Conveyed Rights, during the effective term of the support
services, to enable the Software to meet the Company's future requirements and
desires, upon the mutual agreement of XOX and the Company, XOX shall design,
program, test and implement enhancements and improvements as the Company may
reasonably request as part of the support services being acquired under Section
7.01, and any man-hours expended on such development shall be deducted from the
amount of support so provided; provided, (i) in the event that XOX in good faith
estimates that the requested enhancements and improvements, in conjunction with
the aforementioned support, shall exceed the number of man-years of support to
be purchased by the Company, then the Company shall, in the event the Company
desires to purchase such support from XOX, pay for the same at the rate of [*]
per [*] for service. ALL ENHANCEMENTS AND IMPROVEMENTS PRODUCED OR PROVIDED BY
XOX UNDER THIS SECTION 7.03 SHALL BE DEEMED WORKS MADE FOR HIRE AND SUCH
ENHANCEMENTS AND IMPROVEMENTS SHALL BE OWNED EXCLUSIVELY BY THE COMPANY. In the
event any such enhancement or improvement may not be deemed a work for hire, XOX
agrees to assign and execute such instruments necessary to perfect the Company's
ownership therein. This section shall in no way be deemed to limit the Company's
interest in the Conveyed Rights.
(b) In the event that XOX agrees in writing to create, design, program or
test any enhancement or improvement reasonably requested by the Company not as
part of the support services provided for in Section 7.01, but instead by
agreement due to the broad scope of the enhancement or improvement project, then
such enhancement or improvement shall either (i) be treated in accordance with
Section 7.02 (and not Section 7.03(a)); provided however, that in the
[*] Confidential portion has been omitted and filed separately with the
Securities and Exchange Commission.
17
event ownership rights in such enhancement or improvement are not transferred to
the Company, then such services (the "Special Services") performed by the
Company shall not count toward, or be credited against, XOX's support
obligations under Sections 7.01 and 7.03(a) and the Company shall be
entitled to additional support services under this Article 7 as if XOX had not
performed the Special Services, or (ii) constitute an enhancement or improvement
covered under Section 7.03(a) and subject to the terms thereof.
7.04 Conversion to Resale Rights. The Company may elect, in the Company's
sole discretion, to convert into Resale Rights all then remaining support
service obligations of XOX as would be due under this Article 7 and payable
through [*]. The Company may effect such conversion by sending to XOX written
notice of such conversion on or before [*]; and notice, if timely given, shall
be effective for all service obligations arising thereafter. Upon timely sending
of such notice by the Company, (i) XOX's service obligations for service arising
for the period [*] through [*] shall be terminated, (ii) the Company shall pay
monthly during the period of [*] through [*] as if the Company were paying for
service obligations under this Article VII, and (iii) the Company shall receive
each month commencing on the first business day of [*], a number of whole
additional Resale Rights determined by dividing (A) the Company's monthly
payment due on such date and determined in accordance with Section 7.01 hereof,
by (B) [*]. Fractions of a Resale Right (if any) arising under the foregoing
shall always be rounded upward to the nearest whole Resale Right. Once the
Company has exercised its right to convert XOX's support obligations into Resale
Rights under this Section 7.04, it may not re-convert such Resale Rights back to
rights to support.
7.05 Pre-Approval. Before assigning any employee or consultant to provide
the Company support services as provided for in this Article VII, XOX shall
provide to the Company a written copy of a proposed employee's or consultant's
experience and resume.
7.06 Training. XOX shall provide the training as provided in Exhibit C.
Upon the Company's request, XOX shall provide additional training, including
refresher training, advanced training and support. Such training shall be
treated as support services and chargeable against the support services being
provided by XOX to the Company under Section 7.01 hereof.
7.07 Time Records. XOX shall provide to the Company, within 60 days after
the end of each quarterly period ended August 31, November 30, February 28 (or
29) and May 31, commencing with the calendar quarter ended August 31, 1998, a
report setting forth in reasonable detail on a daily basis (i) the number of
hours worked by each XOX employee pursuant to this Article 7 providing support
services to the Company, (ii) the name of such XOX employee and (iii) a brief
but clear description of the support services performed on the applicable date.
7.08 Failure to Make Reasonable Efforts. The Company may notify XOX in
writing of any failure by XOX to make the reasonable efforts to provide the
support services contemplated under
[*] Confidential portion has been omitted and filed separately with the
Securities and Exchange Commission.
18
this Article VII (a "First Notice"). XOX shall have 30 days after the First
Notice is sent to XOX to resume such reasonable efforts. If XOX fails to resume
and continue such reasonable efforts, the Company may suspend payment of the
support or other applicable payments contemplated in this Article VII, and issue
a second notice to XOX with respect to XOX's continued failure (a "Second
Notice"), and of the Company's intention to obtain such services described in
the First Notice from a Third Party, from the internal resources of the Company,
or from an Affiliate of the Company. If at any time within 30 days after the
Second Notice is sent to XOX, XOX resumes and continues reasonable efforts in
the provision of support services contemplated in this Article VII, and pays the
reasonable costs (reasonable costs, in the case of internal costs of the Company
or an Affiliate thereof, to include appropriate allocations of overhead
necessary to determine the full cost of the services provided) that the Company
has incurred to obtain such support services, as were described in the First
Notice, from (i) a Third Party, (ii) an Affiliate of the Company, and (iii)
internal personnel resources, then the support services payments shall commence
again on and as of the first day of the calendar month following the calendar
month in which XOX resumed performing the support services described in the
First Notice. If XOX does not resume and continue reasonable efforts in the
provision of support services within such 30 day period following the sending
of the Second Notice, the Company may terminate permanently its obligation to
pay for and purchase all future support services contemplated in this Article
VII upon providing to XOX written notice of such termination.
ARTICLE VIII. TERM
8.01 Term. This Agreement shall become effective upon the Effective Date
and [*].
ARTICLE IX. REPRESENTATIONS AND WARRANTIES
9.01 XOX Representations. XOX represents, warrants and covenants that:
(a) The rights and interests granted or to be granted by XOX to the
Company herein are granted and shall be granted free and clear of
any lien, security interest or other claims of any Person, except
for source code escrows and source code vaulting agreements.
(b) XOX has full and sufficient right, title and authority to grant to
the Company the rights, licenses, or interests in and to the
Conveyed Rights as provided in this Agreement. Except as set forth
in Schedule 9.01(b) hereto, to the best of XOX's knowledge, the
conveyance of the Conveyed Rights, exercise of the Conveyed Rights
by the Company, and delivery of the Conveyed Rights in accordance
with this
[*] Confidential portion has been omitted and filed separately with the
Securities and Exchange Commission.
19
Agreement do not constitute an infringement of any Third-Party's
interest and/or intellectual property rights, including, without
limitation, patent, trade secret, copyright, mask work rights and
SUI GENERIS rights.
(c) Except as set forth on Schedule 9.01(c) hereto, XOX is not aware
of any claim (whether or not embodied in any action, past or
present) of infringement of any intellectual property involving or
concerning the Conveyed Rights or any part thereof has been
threatened or asserted against XOX, and no such claim is pending
against XOX.
(d) All XOX enhancements and improvements are and will be Year 2000
Compliant.
(e) No Third-Party has any right or claim to the Source Code, except
for source code escrows or source code vaulting agreements. XOX will
notify the Company of any Third Party rights which arise in
connection with any of the Conveyed Rights, and will have obtained
any required consents, approvals and waivers necessary for XOX to be
able to execute, deliver and perform the terms and provisions of the
Agreement and to provide to the Company the benefits of such terms
and provisions, other than consents of third parties supplying
software components or modules embedded in a Conveyed Right -- and
with respect thereto XOX shall use its best efforts in assisting the
Company in obtaining the consents of such Persons to the Company's
use thereof pursuant to the terms of this Agreement.
(f) As of the Effective Date, no bulk sales laws (such as Article 6 of
the Model Uniform Commercial Code, as adopted in Minnesota) are
applicable to the transactions contemplated herein. In the event
that any such bulk sales laws shall hereafter apply to the
transactions contemplated herein, then XOX shall comply with all
such laws, and shall cooperate with the Company in effecting such
compliance and in informing the Company of the status of such
efforts.
ARTICLE X. INDEMNITY
10.01 XOX Indemnity. (a) XOX will defend, at its expense, any action
brought against the Company to the extent that it is based on a claim that the
use of the Software or any Conveyed Rights, within the scope of this Agreement,
infringes any patent, trade secret, mask work right, copyright or SUI GENERIS
right, and XOX will indemnify the Company from any expenses, costs, damages, and
fees (including attorney's fees) incurred by or finally awarded against the
Company in such action which are attributable to such claim; provided that the
Company notifies XOX promptly in writing of the claim; and provided further that
the Company permits XOX to defend, compromise,
20
or settle the claim and provides all available information, assistance and
authority to enable XOX to do so. The Company shall have no authority to settle
any claim on behalf of XOX and any such settlement shall be at the Company's
risk and all costs, damages, and fees covered by such settlement shall be the
responsibility of the Company. Nothing contained herein shall constitute XOX the
agent of the Company, and XOX shall have no authority to bind, or act in the
name of or on behalf of, the Company. XOX shall have no liability to Company for
any claim of infringement based on use of the Software or Conveyed Rights as
modified or used by Company with other software or data if such infringement
would have been avoided by the avoidance of the use of such other software or
data.
(b) The Company will defend, at its expense, any action brought against
XOX to the extent that it is based on a claim that the use of the Company
Intellectual Property (or any part thereof), infringes any patent, trade secret,
mask work right, copyright or SUI GENERIS right, and the Company will indemnify
XOX from any expense, costs, damages, and fees (including attorney's fees)
incurred by or finally awarded against XOX in such action which are attributable
to such claim; and provided further that XOX notifies the Company promptly in
writing of the claim; and provided further that XOX permits the Company to
defend, compromise, or settle the claim and provides all available information,
assistance and authority to enable the Company to do so. XOX shall have no
authority to settle any claim on behalf of the Company and any such settlement
shall be at XOX's risk and all costs, damages, and fees covered by such
settlement shall be the responsibility of XOX. Nothing contained herein shall
constitute the Company as the agent of XOX, and the Company shall have no
authority to bind, or act in the name of or on behalf of, XOX.
10.02 Right to Use. Should any Conveyed Rights become, or in XOX's
opinion be likely to become, the subject of a claim of infringement of a patent,
trade secret, mask work right, copyright or a SUI GENERIS right, XOX shall, upon
the Company's request, (i) procure for the Company, at no cost to the Company,
the right to continue to use the Conveyed Rights or (ii) replace or modify the
Conveyed Rights, at no cost to the Company, to make such non-infringing,
provided that the same rights and function and performance level shall be
maintained by the replacement or modified Conveyed Rights. Should use of
Software be enjoined, XOX shall, upon the Company's request, procure or replace
as indicated above. The aforementioned remedies shall be in addition to and not
exclusive of any remedy the Company may otherwise enjoy.
ARTICLE XI. PROTECTION AND DEFENSE
11.01 Maintenance of Conveyed Rights. Each of the Company or XOX may, in
its discretion and at its expense, take such action from time to time after the
Effective Date as may be reasonable or appropriate, in its judgment, to protect
and preserve its title and interest in the Conveyed Rights and those retained by
XOX, including by compliance to the extent the Company or XOX deems reasonable
or appropriate, in its judgment, with applicable laws and regulations, both
21
United States and foreign, respecting the registration of copyrights, the
continuing registration of any registered copyrights, payment of any maintenance
fee on any issued patent, requiring the other party to cause its appropriate
employees, Affiliates and employees of Affiliates to execute or enforce
reasonable nondisclosure and non-compete agreements, seeking patent protection
and by seeking to enjoin any infringement by Third-Parties of the intellectual
property represented by any Conveyed Rights or any part thereof.
11.02 Enforcement. Neither the Company nor XOX shall have any duty to
enforce any instance of alleged infringement or misappropriation or the Conveyed
Rights; provided however, that a party learning of such alleged infringement
shall identify in writing any such incident of alleged infringement or
misappropriation to the other party within thirty (30) days of learning of such
alleged act(s) of infringement. The parties shall then meet as soon as possible
to discuss whether joint action against the alleged infringer is to be
undertaken. If one party declines to join in such prosecution of such claims, or
fails to take appropriate action to prosecute such claims within thirty (30)
days of receipt of written notice from the other party, then said declining or
failing party shall be deemed to have assigned all its rights under such claim
to the other party who shall be free, at its own cost and expense, to pursue and
prosecute such persons and claims as it sees fit in its own name. A party
bringing a separate action shall defend and indemnify the party not joining in
that action against any counterclaim, cross-complaint, or cross-claim brought
against the party not joining in the action seeking a declaratory judgment that
the Conveyed Rights which are the subject of the action are invalid,
unenforceable or not infringed.
11.03 Enforcement Damage. If, as a result of any infringement or
misappropriation action asserted solely by one party hereto (where the other
party has, after written notice, declined or failed to take action to join in
said action), damages are collected based specifically on the infringement or
misappropriation of any Conveyed Rights by a Third-Party, then the prosecuting
party shall be entitled to receive all of the damages recovered. If, as a result
of any infringement or misappropriation action asserted jointly by the Company
and XOX, damages are collected based specifically on the infringement or
misappropriation of any Conveyed Rights by a Third-Party, then the Company and
XOX shall be each entitled to receive one-half of the damages recovered after
the respective costs and expenses of each party related to such action have been
reimbursed and satisfied.
11.04 Procurement of Patents. It is agreed and understood that neither
party shall have any duty or obligation to seek to file or obtain patent
protection for any of the Conveyed Rights. The parties acknowledge and agree
that, in the event patent protection for an invention covering the Conveyed
Rights is to be prepared and filed, XOX shall have the first opportunity for
preparation, filing and/or prosecution of any patent related to the Conveyed
Rights through counsel of its choice. Company may join XOX as co-owner of any
such patent application or patent by agreeing to pay one-half of XOX's costs and
expenses involved in seeking patent protection for such invention. If Company
declines to make such payment within 30 days of a request for such payment, it
shall not be deemed to be a co-owner of any resulting patent; provided, however,
that Company shall have a non-exclusive world-wide right and license, with right
to sublicense, under any such patent
22
application or patent issuing thereon in the field of the Business. In the event
that XOX determines that it does not wish to seek patent protection for a
particular invention relating to the Conveyed rights, (i) XOX shall notify the
Company in writing, specifically identifying the applicable Conveyed Rights, at
least twenty (20) days prior to the date of any act, occurrence or deadline date
that would constitute a bar to the patentability of such Conveyed Rights under
the laws of the United States or any foreign jurisdiction, so as to allow the
Company an opportunity to review such written description following receipt
thereof in order to determine whether the Company desires to seek patent
protection for such Conveyed Rights, and (ii) the Company shall be free to apply
for a patent solely in its own name, at its sole cost and expense, and be the
sole owner thereof, provided, however, that XOX shall have a non-exclusive
world-wide right and license, with right to sublicense, under any such patent
application or patent issuing thereon.
11.05 Confidentiality. (a) Company shall make reasonable efforts to
protect the XOX Confidential Information, including, without limitation,
imposing contractual confidentiality and noncompetition obligations upon all
individuals, Affiliates, employees of Affiliates of the Company, and Third
Parties who are provided any portion of the same, to the extent legally
permissible. The Company's obligations pursuant to this Section 11.05(a) above
shall not apply to: (i) information that, at the time of disclosure, is, or,
after disclosure, becomes generally known or available to the public other than
as a consequence of the Company's breach of this Agreement; (ii) information
(other than information provided to the Company by XOX) that was known or
otherwise available to the Company prior to disclosure thereof by the Company;
(iii) information disclosed by a third party to the Company after disclosure by
the Company if such third party's disclosure neither violates any obligation of
the third party to XOX nor is a consequence of the Company's breach of this
Agreement; (iv) information that XOX authorizes for release, (v) information
required to be disclosed pursuant to the order of a court of competent
jurisdiction, and (vi) information disclosed in connection with dispute
resolution procedures pursuant hereto between the Company and XOX.
(b) XOX shall make reasonable efforts to protect the Company Confidential
Information, including, without limitation, imposing contractual confidentiality
and non-competition obligations upon all individuals, Affiliates, employees of
Affiliates, and Third Parties who are provided any portion of the same, to the
extent legally permissible. XOX's obligations pursuant to this Section 11.05(b)
above shall not apply to: (i) information that, at the time of disclosure, is,
or, after disclosure, becomes generally known or available to the public other
than as a consequence of the XOX's breach of this Agreement; (ii) information
that was known or otherwise available to XOX prior to disclosure by XOX; (iii)
information disclosed by a third party to XOX after disclosure by XOX if such
third party's disclosure neither violates any obligation of the third party to
the Company nor is a consequence of XOX's breach of this Agreement; (iv)
information that the Company authorizes for release, (v) information required to
be disclosed pursuant to the order of a court of competent jurisdiction, and
(vi) information disclosed in connection with dispute resolution procedures
pursuant hereto between the Company and XOX.
23
11.06 Hiring Limitations. The Company agrees that, for a period of [*]
following the date hereof, the Company shall not solicit for employment any
employee of XOX, provided however, that the foregoing restriction shall not
apply where (a) a XOX employee makes the initial contact with the Company
without prior solicitation by the Company, or (b) where a XOX employee answers
so-called "blind" advertisement of employment placed by the Company in general
circulation media, such as newspapers, trade journals, technical journals, or
the like, or (c) if XOX has entered into or is otherwise subject to any
arrangements for winding up or liquidation of its business, including, without
limiting the generality of the foregoing, any pending bankruptcy proceeding that
XOX is the subject of under the United States Bankruptcy Code (11 U.S.C. ss. 101
et. seq.).
ARTICLE XII. INFORMATION EXCHANGE
12.01 Protection. During the term of this Agreement, a party hereto may
provide the other party access to Confidential Information. Without the prior
written consent of the disclosing party or compulsion by court order, a party
receiving Confidential Information of the other shall (i) only disclose such
Confidential Information to the receiving party's officers, employees and
subcontractors involved in the performance of this Agreement and who have a need
to know and (ii) protect the Confidential Information with the same degree of
care as it would use to protect its own information of a similar nature.
12.02 Company Improvements. In the event the Company independently
develops, reduces to practice or conceives Company Intellectual Property, the
Company shall own all such know-how, modifications or other proprietary
technology. Nothing in this Agreement shall be deemed to grant to XOX or create
an obligation on the Company's part to grant to XOX any right in Company
Intellectual Property, now existing or which may hereafter arise or come into
existence.
ARTICLE XIII. MISCELLANEOUS
13.01 Disclaimer. Except as provided in this Agreement, XOX MAKES AND THE
COMPANY RECEIVES NO WARRANTIES, EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE; AND
XOX SPECIFICALLY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR WARRANTY CONCERNING THE QUALITY OR PERFORMANCE OF THE
SOFTWARE, DEVELOPMENT ENVIRONMENT OR DOCUMENTATION.
13.02 Expenses. Except as expressly provided for herein, each party shall
provide for and bear all of their respective costs of performance and expenses
for their own account.
[*] Confidential portion has been omitted and filed separately with the
Securities and Exchange Commission.
24
13.03 Integration. The provisions of this Agreement and the Assignment
Agreement constitute the entire agreement between the parties and supersede all
prior agreements, oral or written, and all other communications relating to the
subject matter hereof. Without limiting the generality of the foregoing, this
Agreement and the Assignment Agreement supersede the written agreements and
licenses executed by XOX and the Company prior to the Effective Date, it being
the intention of the parties hereto that this Agreement and the Assignment
Agreement be and set forth the exclusive terms of the agreements between the
parties hereto with respect to the support, maintenance and the Conveyed Rights.
Except as otherwise provided herein, the rights and obligations provided herein
shall be cumulative of those set forth in such other instruments. There are no
unwritten or oral agreements of the parties hereto.
13.04 Successors and Assigns. This Agreement shall be binding on and
shall inure to the benefit of the parties hereto, and their successors or
assigns. There are no limitations upon the assignment by the Company of its
right hereunder to any Person. Except in connection with a merger of XOX with
another Person or sale by XOX of all or substantially all of its assets, XOX
shall not assign its rights or delegate its duties hereunder without the prior
written consent of the Company, such consent not to be unreasonably withheld.
XOX may assign the benefits it receives under this Agreement, consisting of the
right to receive the consideration contemplated herein for the various services
being performed for the Company or the rights being granted to the Company.
13.05 Headings. The headings, subheadings and captions found in this
Agreement are for reference purposes only and are to be given no effect in the
construction of this Agreement.
13.06 Counterparts. This Agreement may be executed in counterparts, each
of which shall be an original and all of which shall together constitute one and
the same instrument. In the event that this Agreement is executed and delivered
by telecopy, original executed copies hereof shall be forwarded by each party to
the other within three business days following such delivery by fax.
13.07 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
13.08 No Exclusive Relationship. This Agreement shall not be construed to
limit either party's right to obtain services or software programs from other
sources, to prohibit or restrict either party from independently developing or
acquiring any software or technology, or to restrict either party from making,
having made, using, leasing, licensing, selling, or otherwise disposing of any
products or services whatsoever. Each party shall have the right to deal with
any other licensors, suppliers, contractors, or customers, except to the extent
expressly prohibited hereby or thereby.
25
13.09 Attorneys Fees. If either party to this Agreement seeks to enforce
its rights under this Agreement by legal proceedings or otherwise, the
non-prevailing party shall pay all costs and expenses, including, without
limitation, reasonable attorneys' fees, incurred by the prevailing party.
13.10 Notices. All notices or other communications required or permitted
under this Agreement must be in writing and shall be deemed given if delivered
personally via facsimile (with receipt confirmed), by recognized international
courier service (with receipt confirmed), or by registered or certified mail,
postage prepaid, to the party involved at its respective address set forth at
the end of this Agreement, or at such other address of which such party may
notify the other from time to time in accordance with this Section. Any such
notice shall be effective upon delivery. Any notice that is sent by facsimile
transmission shall be deemed to have been duly given to the party to which it is
addressed upon facsimile confirmation of the same as provided herein. Any notice
that is sent by internationally recognized courier service shall be deemed to
have been duly given to the party to which it is addressed upon confirmation of
delivery in writing by the delivery service. The following international
delivery services shall be deemed to be "recognized" for the purposes of this
Agreement: DHL, Federal Express, United Parcel Service, Seur and Airborne
Express.
13.11 Judicial Proceeding. The parties shall give each other immediate
notice of any attachment or other judicial process affecting the Conveyed
Rights.
13.12 Arbitration. Except as provided for in Section 4.04, the parties
agree to resolve any disputes related to or arising out of this Agreement or the
Assignment Agreement as provided in Exhibit D, the terms of which are
incorporated herein by reference.
13.13 Jurisdiction/Choice of Law. This Agreement shall be deemed accepted
and delivered in and governed by and construed under the laws of the State of
Texas and the United States of America. No conflicts of law rule or law which
may refer to the laws of another state, republic or country shall be considered.
The Parties consent to the jurisdiction and venue of the federal and state
courts located in ▇▇▇▇▇▇ County, Texas concerning any disputes or claims arising
from or connected to this Agreement and agree that any action concerning any
disputes or claims from or connected to this Agreement shall, to the extent not
covered by arbitration as provided for in Section 13.12 hereof, be conducted
solely within the courts situated therein. The parties hereby exclude the
application of The Convention for the International Sale of Goods.
13.14 Third-Parties. Nothing in this Agreement shall be construed to
create any duty to, or standard of care with reference to, or liability of a
party to, any Person other than a party.
13.15 United States Laws. The parties agree that this Agreement is
subject to United States export controls and regulations and understand the
necessity for obtaining export licenses and the like and agree to cooperate to
secure and faithfully perform under such licenses.
26
13.16 No Joint Venture. Nothing herein shall be deemed to make either
party the agent or partner of the other or to create a partnership or joint
venture between the parties and no party shall have the power to bind the other
in any way.
13.17 All or Any Part of Conveyed Rights. Each reference herein to any
right of the Company (i) to enforce, use, own, sell, convey, license,
sublicense, distribute, produce, reproduce, display, modify, enhance, improve,
evolve or alter the Conveyed Rights, (ii) to prepare derivative works based on
the Software, (iii) subject to the express terms hereof, to authorize others,
and to convey, assign, transfer or license to others the right, to do some or
all of the foregoing, and (iv) to protect and defend its rights to the Conveyed
Rights, shall be deemed to be a reference to all or any part of the Conveyed
Rights, it being the intention of the parties hereto to grant to the Company the
rights described herein with respect to all or any part of the Conveyed Rights
and to allow for the exercise by the Company of such rights with respect to all
or any part of the Conveyed Rights.
13.18 No Partition. Company shall not initiate any action to partition
its interests in the Conveyed Rights.
13.19 New Application. Nothing contained herein or in any other agreement
between the Company and XOX shall limit or restrict the power, right or
authority of the Company to (i) create or develop new geometric modeling
applications using the Software, or (ii) create or develop any substitute or
replacement for the Software, and no payments shall be due or owing to XOX by
the Company on account of any use, sale, license, sublicense or lease of any
software that is a replacement or substitute for the Software, if such
substitute or replacement is created by the Company independently of the
Software (such as in a clean room and without use of, and independent of, the
Software, the Source Code, the Development Environment, the Documentation, XOX
Confidential Information, or any Conveyed Rights in which XOX has an interest).
27
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized representatives as of the date first
above written.
COMPANY:
SCHLUMBERGER TECHNOLOGY
CORPORATION
By: ____________________________________
Print Name: ____________________________
Print Title: ___________________________
Address for Notices:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: _____________________________
Telecopy No.: __________________________
XOX:
XOX CORPORATION
By: ____________________________________
Print Name: ____________________________
Print Title: ___________________________
28
Address for Notices:
XOX Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: _____________________________
Telecopy No.: __________________________
29
EXHIBIT A
COMPANY STANDARD TERMS
The following are the Terms and Conditions under which GeoQuest [INSERT NAME OF
APPLICABLE COMPANY], ("GeoQuest") sells, leases, and/or licenses Products and
Services.
1.0 DEFINITIONS
1.1 "Documentation" refers to manuals, handbooks, maintenance libraries,
and other publications in whatever form listed in GeoQuest's Price
List or supplied in connection with Services.
1.2 "Equipment" refers to computer related hardware and other equipment
that is listed on a quotation.
1.3 "External Software" refers to stand-alone, off-the-shelf application
software packages listed on the quotation which are licensed to
Customer in accordance with these Terms and Conditions by the
applicable third party software vendors. Such third party software
vendors are third party beneficiaries to this License Agreement and
shall have the right to enforce these Terms and Conditions to the
extent they apply to External Software.
1.4 "Party" refers to GeoQuest or Customer, "Parties" refers to GeoQuest
and Customer.
1.5 "Products" refers to items listed on a quotation, including but not
limited to Software and Equipment.
1.6 "Proprietary Information" refers to, without limitation, Software
(including all enhancements, updates, corrections, derivative works
and other modifications thereto); Documentation, diagnostic software,
equipment or other materials used by GeoQuest in the performance of
installation, warranty work or services which may be furnished with
Products or stored at Customer's facility; Equipment design
information; GeoQuest supplied printed materials; visually transmitted
information; and any modifications or components thereof, whether made
by GeoQuest or Customer.
1.7 "Service Descriptions" refers, as applicable, to documents, including
Standard Terms and Conditions for Equipment Maintenance; Software
Maintenance; and On-Site Customer Support, issued by GeoQuest that
provide information regarding GeoQuest's and Customer's obligations
for Services provided under these Terms and Conditions.
1.8 "Services" refers to GeoQuest software, equipment, customer support,
and educational services (including implementation and maintenance
services) listed on a quotation or Maintenance Agreement for which
there is a Service Description.
1.9 "Software" refers to software listed on a quotation including, without
limitation, application software, systems software, External Software,
microcode and firmware, and, where included, documentation and manuals
related thereto. For Software, the term "purchase" or "sale" means
"license".
1.10 "Software License" refers to the software license granted by GeoQuest
in accordance with Article 10.0.
2.0 ORDERS
Prices and fees for products and Services will be as specified in a
quotation that is current at the time an order is accepted, or in the
absence of a quotation, shall be GeoQuest's then-current standard prices
and fees. Prices for Services provided under an accepted quotation may be
changed by GeoQuest effective January 1 of the next year, on thirty (30)
days' written notice to Customer.
3.0 PAYMENT
3.1 Purchase. For Product purchases, Customer shall make full payment
within [*] days after the date of shipment of the Products, provided
Customer maintains credit arrangements satisfactory to GeoQuest.
Customer shall make full payment for Services and other items
described herein for which no "shipment" is involved within [*] after
receipt of invoice. All payments shall be made in the currency set
forth on the quotation (or in U.S. dollars if no other currency is
indicated).
3.2 Lease. If the quotation or Service Description provides for a lease or
rental to Customer of Products from GeoQuest, GeoQuest's Standard
Leasing Terms and Conditions, attached hereto, shall apply in
addition to these Terms and Conditions.
4.0 TAXES
Prices listed do not include any local, state or federal sales, use,
excise, personal property, value added, import/export, or other similar
taxes or duties, which may be assessed in connection with the Products, and
Customer agrees to pay all such assessments. In the event GeoQuest must
initially pay such assessments, Customer agrees to reimburse GeoQuest
within [*] after receipt of GeoQuest's invoice. Taxes based upon GeoQuest's
income shall be the sole responsibility of GeoQuest.
5.0 SHIPMENT
5.1 Shipment. Prices exclude shipping charges. Products will be shipped
FOB point of origin. Customer will be responsible for shipping charges
and for procuring insurance, unless otherwise specified. Customer
shall assume all risks of loss upon GeoQuest's delivery to the
carrier.
5.2 Security Interest. GeoQuest retains title to and a security interest
in the Equipment as security for Customer's payment for the Equipment
until the purchase price for the Equipment has been paid in
[*] Confidential portion has been omitted and filed separately with the
Securities and Exchange Commission.
full. Customer agrees to execute such documents as GeoQuest may
reasonably require to perfect and further evidence this security
interest.
6.0 INSTALLATION
6.1 Equipment. GeoQuest shall install Equipment if the price includes
installation or if Customer separately purchases installation
services.
6.2 Software. Software shall be installed onto GeoQuest-authorized servers
and/or computers in accordance with Article 10.3.2. Unless GeoQuest
installation services have been ordered, Customer shall perform such
installation.
6.3 Customer Responsibilities. Customer shall provide the necessary
environment and electrical power supply connections as specified by
GeoQuest and the equipment manufacturer and shall be responsible for
transporting the Equipment to its location within Customer's facility.
7.0 CANCELLATION CHARGES
In the event Customer cancels an order for Products, Customer shall pay
within thirty (30) days thereafter a cancellation charge in the amount
of ten percent (10%) of the total price for the canceled Products. No
cancellation by Customer will be accepted after the date of shipping, or
for Products being specially developed for Customer once development has
commenced. For Products ordered from GeoQuest suppliers on behalf of
Customer, the "date of shipment" shall be the date Products are shipped
from the GeoQuest supplier(s).
8.0 WARRANTY
8.1 Equipment Warranty.
8.1.1 Equipment sold is warranted to be in good and serviceable
condition. The warranty period for Equipment shall be as
specified in the quotation, or for a period of ninety (90) days
if no such warranty period is specified. The warranty period
begins on the date installation is completed or upon delivery if
the Equipment is installed by Customer. If GeoQuest is prevented
from installing the Equipment by causes beyond its control for
more than thirty (30) days from the date of delivery, the
warranty period will commence on the thirtieth (30th) day after
delivery.
8.1.2 Equipment may also be warranted by the third party supplier.
GeoQuest's sole liability and Customer's sole remedy for breach
of this warranty is limited at GeoQuest's sole option to either:
(a) the repair or replacement of the defective Equipment or
part, or (b) the refund of the purchase price of the defective
Equipment which is returned by Customer at Customer's cost to
the location specified by GeoQuest.
8.2 Software Warranty
8.2.1 The warranty period for Software shall be: (a) ninety (90) days
from the date of delivery of the Software, or (b) one hundred
twenty (120) days from the date of shipment to Customer,
whichever occurs first.
8.2.2 Subject in all cases to Article 8.3, during the warranty period,
GeoQuest warrants: (a) that the Software shall function
substantially in accordance with published GeoQuest product
specifications at the time the order is accepted; and (b) that
GeoQuest shall correct Software defects which prevent the
substantial use of the Software in accordance with such product
specifications.
8.2.3 Due to the complex nature of Software, GeoQuest does not warrant
that Software is error free or that all errors will be
corrected.
8.3 External Software. GeoQuest does not warrant the form or content of
External Software or related documentation, which GeoQuest provides
"as is".
8.4 Service Warranty. GeoQuest will use reasonable efforts to provide
Service for Products pursuant to these Terms and Conditions subject to
Customer's fulfillment of its obligations.
8.5 Limitations. GeoQuest's sole responsibility under these warranties
shall be to provide the Products described in the quotation.
Warranties described in Sections 8.1 and 8.2 and Services do not
include warranties or Services for: (a) any products other than
Products listed in the quotation, or (b) conditions resulting from
improper use or storage of the Products or operation of the Products
outside the specified environmental conditions, or (c) conditions
resulting from causes external to the Products after delivery, or (d)
conditions resulting from modifications to the Products other than
modifications made by GeoQuest or GeoQuest's service vendor, or (e)
conditions resulting from Customer's movement of the Products, or (f)
Products from which GeoQuest's or GeoQuest's service vendor's serial
numbers have been removed, or (g) use of Software with operating
system software version other than GeoQuest-designated versions.
8.6 Disclaimer of Warranties. Except as expressly stated herein, GEOQUEST
MAKES NO WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, WITH RESPECT TO
THE PRODUCTS/SERVICES PROVIDED, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
9.0 SERVICES
9.1 Supplemental Terms and Conditions. To the extent the quotation or
Service Description includes Customer's purchase of software
maintenance; hardware maintenance; and/or on-sight support, separate
GeoQuest terms and conditions for each of such services, attached
hereto as applicable, shall apply to such services in addition to
these Terms and Conditions.
9.2 Service Term. GeoQuest, or GeoQuest's service vendor, shall provide
the Services described in the quotation for the term specified therein
and/or in the Service Description.
9.3 Add-on Products. Add-on Products approved for use and service as part
of an earlier-acquired GeoQuest system shall be placed under the
applicable GeoQuest service contract covering the GeoQuest system, if
any. The add-on Products will be serviced for the remainder of the
service contract term following the warranty period for the add-on
Products, and the cost of this additional service contract coverage
shall be based on appropriate prorating of the then current list price
for service of the add-on Products.
9.4 Movement of Products. Customer shall give GeoQuest sixty (60) days'
prior written notice of any movement of the Products to any other
location. If the Products are moved to a location serviced by
GeoQuest, the Products shall continue to be serviced under this
Agreement and shall be subject to any additional fees in accordance
with the then current price list. Customer shall be responsible for
any costs of de-installation, packing, transporting, unpacking,
installation and repair necessitated by the move.
10.0 SOFTWARE LICENSE
10.1 License. GeoQuest grants to Customer a nonexclusive, nontransferable
license to use Software and Proprietary Information described in the
quotation in accordance with these Terms and Conditions. This Software
License shall commence upon GeoQuest's delivery of Software to
Customer and shall continue unless terminated by default or
cancellation. GeoQuest (and/or when applicable GeoQuest's licensor(s))
shall at all times retain title, copyright and proprietary ownership
of Software and Proprietary Information, including all components,
additions, modifications and updates. Where title to certain Software
is retained by GeoQuest's licensors, GeoQuest represents that it has
the authority to license such Software to Customer. While providing
the Services, GeoQuest develops additional expertise, know-how and
other intellectual property which are GeoQuest's exclusive property
and which GeoQuest may freely utilize in providing services for its
other customers. Except where expressly and specifically indicated in
writing, and in exchange for appropriate payment, GeoQuest does not
develop any intellectual property (including copyrights, patents,
know-how, and expertise) for ownership by Customer under these Terms
and Conditions, and GeoQuest retains sole ownership of any such items
created during the course of providing Services hereunder.
10.2 License Termination. Subject to the right to cure for non-payment,
GeoQuest shall have the right, immediately upon any default by
Customer, to pursue all available remedies at law or equity, and may
terminate this Software License and/or these Terms and Conditions.
Upon termination of this Software License, Customer shall discontinue
all use of the Software and return the Software and Proprietary
Information to GeoQuest, including all copies. If Customer ceases to
operate for any reason, including but not limited to bankruptcy or
dissolution, and the Software is not transferred in accordance with
Article 10.6, Customer shall return the Software to GeoQuest. Customer
shall, upon GeoQuest's request, certify that all such Software,
Proprietary Information, and copies have been returned to GeoQuest.
10.3 Use
10.3.1 For purposes of these Terms and Conditions and this Software
License, the term "use" shall be limited to the processing of
information and the process of copying, recording, or
transcribing Software. Use does not include modifying Software
in any way, creating derivative versions thereof, reverse
assembling, reverse compiling, or reverse engineering Software
or distributing it to other parties or making it available for
any use, directly or indirectly, by another person, any such
utilization of Software being hereby expressly prohibited.
10.3.2 Software shall be used solely in conjunction with
GeoQuest-authorized computers, servers, and workstations, at
authorized locations, and accessed by only the agreed number of
seats for which Customer is licensed. A GeoQuest-authorized
computer or server is the processor or equipment configuration
on which the Software is first installed pursuant to the license
grant. A GeoQuest-authorized workstation includes all
workstations on a Local Area Network that are physically
located within five hundred (500) meters of a
GeoQuest-authorized server.
10.3.3 Licensed use shall be restricted to the processing or
interpretation by Customer of Geoscience, reservoir, and
production related data owned or licensed by Customer in
connection with: (a) oil, gas and other natural resource
development ventures where Customer is active as operator or
partner; and (b) evaluations for Customer's internal use of such
ventures in which Customer contemplates becoming active as
operator or partner.
10.3.4 Storage media which Customer receives from GeoQuest may contain
certain software which is not covered in the quotation. If
Customer desires to obtain a license for such separate software,
Customer must obtain the appropriate licenses from GeoQuest.
Customer agrees to comply with and not deliberately modify or
make inoperable any feature which is incorporated in the
Software to prevent access to unlicensed software. Customer
acknowledges that Software and Equipment may now or in the
future contain security devices for the protection of Software.
10.3.5 GEOQUEST DOES NOT GUARANTEE RESULTS. ALL INTERPRETATIONS USING
THE PRODUCTS, AND ALL RECOMMENDATIONS OR RESERVOIR DESCRIPTIONS
BASED UPON SUCH INTERPRETATIONS, ARE OPINIONS BASED ON
INFERENCES FROM MEASUREMENTS AND EMPIRICAL RELATIONSHIPS AND ON
ASSUMPTIONS, WHICH INFERENCES AND ASSUMPTIONS ARE NOT
INFALLIBLE, AND WITH RESPECT TO WHICH COMPETENT SPECIALISTS MAY
DIFFER. IN ADDITION, SUCH INTERPRETATIONS, RECOMMENDATIONS AND
RESERVOIR DESCRIPTIONS MAY INVOLVE THE OPINION AND JUDGMENT OF
CUSTOMER. CUSTOMER HAS FULL RESPONSIBILITY FOR ALL
INTERPRETATIONS, RECOMMENDATIONS AND RESERVOIR DESCRIPTIONS
UTILIZING THE PRODUCTS. GEOQUEST CANNOT AND DOES NOT WARRANT THE
ACCURACY, CORRECTNESS OR COMPLETENESS OF ANY INTERPRETATION,
RECOMMENDATION OR RESERVOIR DESCRIPTION. UNDER NO CIRCUMSTANCES
SHOULD ANY INTERPRETATION, RECOMMENDATION OR RESERVOIR
DESCRIPTION BE RELIED UPON AS THE SOLE BASIS FOR ANY DRILLING,
COMPLETION, WELL TREATMENT, PRODUCTION OR OTHER FINANCIAL
DECISION, OR ANY PROCEDURE INVOLVING ANY RISK TO THE
SAFETY OF ANY DRILLING VENTURE, DRILLING RIG OR ITS CREW OR ANY
OTHER INDIVIDUAL. CUSTOMER HAS FULL RESPONSIBILITY FOR ALL SUCH
DECISIONS AND FOR ALL DECISIONS CONCERNING OTHER PROCEDURES
RELATING TO THE DRILLING OR PRODUCTION OPERATION. CUSTOMER
AGREES THAT GEOQUEST SHALL HAVE NO LIABILITY TO CUSTOMER OR TO
ANY THIRD PARTY FOR ANY ORDINARY, SPECIAL, OR CONSEQUENTIAL
DAMAGES OR LOSSES WHICH MIGHT ARISE DIRECTLY OR INDIRECTLY BY
REASON OF CUSTOMER'S USE OF THE PRODUCTS. CUSTOMER SHALL
PROTECT, INDEMNIFY, HOLD HARMLESS AND DEFEND GEOQUEST OF AND
FROM ANY LOSS, COST, DAMAGE, OR EXPENSE, INCLUDING
ATTORNEYS'FEES, ARISING FROM ANY CLAIM ASSERTED AGAINST GEOQUEST
THAT IS IN ANY WAY ASSOCIATED WITH THE MATTERS SET FORTH IN THIS
ARTICLE 10.3.
10.3.6 Software is licensed for use in the country where first
delivered and may not be transferred outside such country
without GeoQuest's prior written consent.
10.4 Copying Software. Customer is encouraged to duplicate Software and
Customer's data maintained by such Software FOR BACKUP PURPOSES ONLY
to protect against the loss of Customer's data. Customer may make
archival copies of the Software as provided in the Copyright Law of
the United States. Customer agrees not to copy or reproduce Software
or any portion thereof for any other purpose. Customer shall reproduce
all copyright, patent, and proprietary rights notice(s) as a part of
the informational content of any copy of the Software in any form. In
the case of disc, tape, or other storage media, Customer shall
reproduce such notice(s) in a visually legible form on the exterior of
the media or first page of the printed volume.
10.5 Protection of proprietary Information.
10.5.1 GeoQuest grants no title or license to Proprietary Information,
which remains the exclusive property of GeoQuest and, where
applicable, GeoQuest's third party licensors. Customer agrees to
secure properly such material and not to use it in any manner,
except as provided in these Terms and Conditions, or make it
available to third parties without GeoQuest's prior written
consent. Customer agrees to keep confidential all Proprietary
Information during the term of this Software License and
thereafter for a period of five (5) years from the termination
of this Software License, and agrees to the subsequent return or
destruction of all Proprietary Information. Customer shall
disclose the Proprietary Information only to its employees on a
need-to-know basis. Customer shall maintain adequate internal
procedures, including appropriate binding agreements with
Customer's employees, to protect the Proprietary Information in
the same manner as Customer protects Customer's own confidential
proprietary information.
10.5.2 Nothing in these Terms and Conditions shall impose an obligation
of confidentiality on Customer with respect to Proprietary
Information which is: (a) rightfully in Customer's possession in
a substantially complete and tangible form prior to the time it
is received from GeoQuest, (b) hereafter furnished to others by
GeoQuest without restrictions on disclosure and use, (c)
hereafter furnished to Customer by a third party as a matter of
right and without restriction on disclosure
or use, or (d) independently developed by Customer without
breach of these Terms and Conditions.
10.5.3 Customer shall give thirty (30) days' prior written notice to
GeoQuest before any proposed disclosure or use of any
Proprietary Information other than as specifically provided
herein that Customer nonetheless considers to be unrestricted by
the non-disclosure obligations created hereunder. Such notice
shall designate the Proprietary Information to be disclosed or
used and the facts which give rise to Customer's belief that the
proposed disclosure or use is unrestricted by the non-disclosure
obligations created by this Article.
10.6 Assignment. No rights or obligations under this Software License or
these Terms and Conditions shall be assigned by either party and any
purported assignment shall be void, except that either party may
assign their rights and obligations under this Software License or
these Terms and Conditions to its successor in interest in the event
of a merger, corporate reorganization, or sale of all or substantially
all of its assets relating to the business to which these Terms and
Conditions pertain, and except that GeoQuest may freely assign its
rights and obligations under this Software License or these Terms and
Conditions to any Schlumberger affiliated company.
11.0 DEFAULT AND REMEDIES
11.1 Customer Default
11.1.1 Customer shall be in default for failure to meet its payment
obligations. Customer shall have thirty (30) days to cure such a
default. However, GeoQuest has the right to charge Customer
interest at the rate of 1.25% per month (or such lower rate as
may be prescribed by applicable law) on any overdue payments.
GeoQuest's right to require interest shall not foreclose
GeoQuest from any other remedy provided by these Terms and
Conditions or applicable law.
11.1.2 Customer shall be in default for its failure to perform any
material obligation under, or for any material breach of, these
Terms and Conditions, and for any disclosure or use contrary to
the terms of the Software License.
11.1.3 Notwithstanding any other provisions contained in the Software
License or these Terms and conditions, the parties agree that a
default caused by an unauthorized disclosure or use of the
Proprietary Information could cause GeoQuest irreparable harm.
Accordingly, the parties agree that GeoQuest will be entitled to
seek timely injunctive relief to prevent Customer from
completing any unauthorized disclosure or use.
11.2 GeoQuest Default
Should GeoQuest default under these Terms and Conditions, Customer
shall give GeoQuest thirty (30) days' written notice to enable
GeoQuest to cure such default. If GeoQuest fails to cure such default
within said thirty (30) day period, Customer shall have the right to
pursue all available remedies at law
or equity. Any action brought against GeoQuest under these Terms and
Conditions must be brought within twelve (12) months after the cause
of action arises.
12.0 PATENT AND COPYRIGHT INDEMNITY
GeoQuest shall defend, or at its option settle, any claim, proceeding or
action brought against Customer based upon a claim that a Product supplied
by GeoQuest constitutes a direct infringement of a patent or copyright
issued under the laws of the country of original delivery, and GeoQuest
shall pay those costs and damages finally awarded against Customer in any
such action or proceeding which result from any such claim, provided always
that GeoQuest shall have no liability under this Article: (a) unless
GeoQuest is notified promptly in writing by Customer of each notice and
communication regarding such claim, is given the complete authority,
information and assistance necessary for such defense, and is given sole
control of the defense of any action on such claim and of all negotiations
for its settlement or compromise, or (b) if Customer makes any admission
regarding infringement.
Should a Product become, or in GeoQuest's opinion be likely to become, the
subject of a claim of infringement or the like under such patent or
copyright laws, Customer shall permit GeoQuest, at GeoQuest's option, to
either: (a) procure for Customer the right to continue using the Product,
(b) replace or modify the Product so that it becomes non-infringing
(provided the same level of functionality is maintained), or (c) accept the
return of the Product and grant Customer a credit for the then depreciated
value of the infringing Product, which for the purposes of this Article
shall be presumed to depreciate by one-fifth (1/5) of its purchase price
per year. If the infringing Product is leased or rented to Customer,
GeoQuest may terminate the lease or rental and Customer's sole remedy in
such case shall be the return by GeoQuest of any payments made by Customer
for periods after such termination.
GeoQuest shall have no liability or obligation to Customer under this
Article for any patent or copyright infringement or claim thereof based
upon: (a) GeoQuest's compliance with Customer's specifications, (b) the
combination of the Product with other items not furnished or approved in
writing by GeoQuest, (c) any unauthorized addition to or modification of
the Product, (d) any use of the Product in the performance of a method or
process (practice of a process), except where such practice is solely
completed by or within the Product, or (e) information, service or
assistance provided by GeoQuest to Customer, excluding software programs
and maintenance/operation manuals. Customer shall defend and hold GeoQuest
harmless against any expense, judgment or loss for alleged infringement of
any patent, copyright or other proprietary right which results from a claim
based upon (a), (b), (c), (d), or (e).
13.0 LIMITATIONS ON REMEDIES
GeoQuest's liability for any breach of this Software License or these Terms
and Conditions, or for personal injury or property damage arising from the
use or installation of the Products shall not exceed the purchase price
paid for the Products and IN NO EVENT SHALL GEOQUEST BE LIABLE FOR SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES INCLUDING ANY DAMAGES RESULTING FROM
LOSS OF USE, LOSS OF DATA, LOSS OF PROFIT, OR LOSS OF BUSINESS WHETHER
ARISING OUT OF OR IN CONNECTION WITH THE PERFORMANCE
OF THE PRODUCTS OR ANY OTHER MEANS, AND REGARDLESS OF THE FORM OF ACTION
UPON WHICH A CLAIM FOR SUCH DAMAGES MAY BE BASED, WHETHER IN CONTRACT, TORT
(INCLUDING NEGLIGENCE), STRICT PRODUCT LIABILITY OR ANY OTHER LEGAL OR
EQUITABLE THEORY. THESE LIMITATIONS SHALL APPLY EVEN IF ANY LIMITED REMEDY
FAILS IN ITS ESSENTIAL PURPOSE. Customer shall at all times be responsible
for product(s) produced by Customer and for providing back-up for all
software applications and data files stored in the Products.
14.0 FORCE MAJEURE
Neither party shall be responsible for delays or failures in performance
resulting from events or circumstances beyond the control of such party.
Such events shall include but not be limited to acts of God, strikes,
lockouts, riots, acts of war, epidemics, governmental acts or regulations,
fires, communication line failures, power failures, and earthquakes. Force
Majeure cannot be used to excuse or delay any payment obligation.
15.0 ARBITRATION
Subject to these Terms and Conditions, any controversy or claim arising out
of or relating to the Products covered in the quotation, or these Terms and
Conditions, or any breach thereof, shall be settled in [INSERT APPLICABLE
LOCATION] by arbitration in the English language in accordance with the
Commercial Arbitration Rules OF [INSERT AMERICAN ARBITRATION ASSOCIATION OR
INTERNATIONAL CHAMBER OF COMMERCE], and judgment upon the award rendered by
the Arbitrator(s) may be entered in any Court having jurisdiction thereof.
Any award rendered by the Arbitrator(s) may include costs against either
Party, but under no circumstances are the Arbitrator(s) authorized or
empowered to award compensatory, punitive or multiple damages against
either Party.
16.0 EXPORT ADMINISTRATION ACT
Regardless of any disclosure by Customer to GeoQuest of the contemplated
ultimate destination of the Products, Customer shall not export or
re-export, directly or indirectly, any Product (or the "direct product" of
any software Product) without first obtaining an export (or re-export)
license from the Department of Commerce or other agency of the United
States Government, as required.
17.0 APPLICABLE LAW AND SUCCESSORS
These Terms and Conditions shall be construed and interpreted in accordance
with the laws of the [INSERT STATE OF TEXAS OR UNITED KINGDOM]. These Terms
and Conditions and this Software License are binding upon, and shall inure
to the benefit of the heirs, personal representatives, authorized
assignees, and successors in interest of the business of either Party,
subject to Article 10.0.
18.0 INTEGRATION
Service Descriptions and quotations that are the subject of Customer's
order shall be considered part of these Terms and Conditions and are
provided to Customer, or if not provided, are available to Customer upon
request. GeoQuest's acceptance of Customer's order will form an agreement
subject only to these Terms and Conditions and is expressly conditional on
Customer's assent to these Terms and Conditions. THESE TERMS AND CONDITIONS
WILL SUPERSEDE ANY PREVIOUS OR CONTEMPORANEOUS COMMUNICATIONS,
REPRESENTATIONS, OR AGREEMENTS BY EITHER PARTY WHETHER VERBAL OR WRITTEN
INCLUDING ANY TERMS AND CONDITIONS ON CUSTOMER'S ORDER. CUSTOMER HAS NOT
RELIED UPON ANY REPRESENTATIONS, ORAL OR WRITTEN, EXCEPT AS ARE MADE IN
THIS AGREEMENT. ANY MODIFICATION TO THESE TERMS AND CONDITIONS MUST BE IN
WRITING AND SIGNED BY AUTHORIZED REPRESENTATIVES OF GEOQUEST AND CUSTOMER.
19.0 SEVERABILITY AND HEADINGS
The unenforceability of any provision hereunder shall have no effect upon
the remaining provisions, which shall continue in full force and effect.
All paragraph headings are purely for convenience and do not form any part
of these Terms and Conditions.
EXHIBIT B
SOFTWARE
THE SOFTWARE DELIVERABLE SHALL CONSTITUTE ALL OF XOX'S SHAPES TECHNOLOGY, SHALL
INCLUDE LIBRARIES SUPPORTED ON SUN, SGI, AND WINDOWS NT INTEL ARCHITECTURE
PLATFORMS AND SHALL INCLUDE (WITHOUT LIMITATION):
(a) libShapes.a(.so), Shapes.lib(.dll), SHAPES Geometry Kernel
[*]
(b) libShapesMT.a(.so), ShapesMT.lib(.dll), SHAPES Micro-Topology Module
[*]
(c) libShapesIcdt.a(.so), Icdt.lib(.dll), SHAPES Incremental, constrained
DeLaunay tessellator
[*]
(d) libShapesWIntp.a(.so), ShapesWIntp.lib(.dll), SHAPES web interpolator
[*]
(e) Patch Modules
[*]
(f) libShapesWSmooth.a, ShapesWebSmooth.lib(.dll), SHAPES Web Smoother
[*]
[*] Confidential portion has been omitted and filed separately with the
Securities and Exchange Commission.
(g) the large model.
[*]
(h) Debugging and other analysis tools, including [*].
[*]
[*] Confidential portion has been omitted and filed separately with the
Securities and Exchange Commission.
EXHIBIT C
TRAINING
1. Software internals course: description of internal workings of the
Software, design considerations, algorithmic foundations. To be presented no
less than two times per year, at a time to be mutually agreed. Course duration:
two weeks.
Apprentice-ship posting at XOX: The Company shall have the right to post one of
its employees (reasonably satisfactory to XOX) at XOX's primary development
location to work with XOX senior technical personnel for purposes of developing
his/her detailed understanding of the Software internals.
2. Application programming course: description of how to use the Software
libraries to develop applications. To be presented no less than two times per
year, at a time to be mutually agreed. Course duration: one week.
EXHIBIT D
ARBITRATION
Arbitration.
(a) Any dispute, controversy, claim or other matter in question between the
parties hereto arising out of or relating to this Agreement or any other
document or instrument executed by the parties hereto in connection with the
Agreement or contemplated in any of the foregoing, including all issues of fact
and law (for the purposes of this Exhibit D, the "Claim"), shall be settled by
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the "Commercial Arbitration Rules"), except as provided
in Section 4.04 and this Exhibit D. Without limiting the generality of the
foregoing, "Claims" shall also include any dispute, controversy, claim or other
matter in question arising out of or related to this Agreement or any document
or instrument executed by the parties hereto in connection herewith, it being
the purpose and intent hereof to evidence the agreement of all the parties
hereto to submit all Claims to arbitration, including claims for tortious
interference or statutory claims arising before, during or after the termination
of this Agreement, providing that such claim touches upon matters covered by
this Agreement. Notice of demand for arbitration shall be filed in writing with
all parties to this Agreement as to whom the Claim is alleged and with the
American Arbitration Association (the "AAA"). For Claims in which the amount in
controversy or dispute is less than $500,000, the arbitration proceeding shall
be conducted by one impartial neutral arbitrator, and for Claims in which the
amount in controversy or dispute is $500,000 or more, the arbitration proceeding
shall be conducted by a panel of three impartial neutral arbitrators. Each
arbitrator (whether one or three, as applicable) shall be appointed from a panel
in accordance with the Commercial Arbitration Rules of the AAA; provided
however, (i) arbitrators shall be selected by the AAA from the listing of
proposed arbitrators (to be submitted to the parties to the dispute) on the
Texas Large Complex Case Panel, and if no arbitrator is selected from such Large
Complex Case Panel, then the arbitrators shall be selected in accordance with
the AAA rules from the Commercial Arbitration Panel List, and (ii) if the
requisite number of impartial neutral arbitrators cannot be selected and
appointed by the parties to the dispute from the first list of names submitted
by the AAA, then the AAA shall submit to each party to the dispute a second list
of names of persons chosen from the panel, and if a neutral impartial arbitrator
cannot be appointed for any reason from said second list, then the AAA shall
then be deemed authorized and directed to and shall select and appoint, on
behalf of all parties to the dispute, the requisite number (as applicable) of
impartial neutral arbitrators (but in no event shall the AAA appoint an
arbitrator whose name has previously been rejected by the parties to the
dispute). All persons submitted as prospective arbitrators by the AAA shall be
persons having substantial knowledge of substantive commercial laws and the
general issues in question for arbitration.
The arbitrator(s) shall honor and apply any common law or statutory defenses to
a Claim. This arbitration agreement permits any party to apply to a court of any
competent jurisdiction at any
time for injunctive relief to maintain the status quo prior to any arbitration
and during the pendency thereof.
(b) The arbitrator(s) shall conduct the arbitration proceeding in Houston,
Texas as provided hereinabove and in the Commercial Arbitration Rules. Time is
of the essence in connection with the conduct of such arbitration proceedings,
and the arbitrator shall conduct the proceedings as expeditiously as possible.
English shall be the exclusive language for conduct of the arbitration
proceedings. The arbitrator rendering the judgment or award shall deliver a
brief written, reasoned opinion explaining such judgment or award and the legal
and factual reasons therefor. This agreement to arbitrate shall be specifically
enforceable under applicable law in any court of competent jurisdiction. The
award rendered by the arbitrator shall be final, and such judgment shall be
entered upon it in accordance with applicable law in a court having jurisdiction
thereof. The parties hereto agree to expedite and cooperate in obtaining the
entry of judgment with respect to such award. A demand for arbitration shall be
made within a reasonable time after the Claim or other matter in question has
arisen. In no event shall the demand for arbitration be made after the date when
institution of legal or equitable proceedings based on such Claim or the matter
would be barred by applicable statutes of limitation. The arbitrator rendering
the Judgment shall not, and is expressly denied the power to, award exemplary or
punitive damages to any party; provided, that in the event a court determines
that the foregoing express waiver of punitive or exemplary damages is
unenforceable, then the arbitrator, and not a court, shall determine if punitive
or exemplary damages shall be awarded.
(c) The party prevailing on substantially all of its claims shall be
entitled to recover its costs, including the arbitrators' fees, and its
attorneys' fees for the arbitration proceedings, as well as for any ancillary
proceeding, including a proceeding to compel or enjoin arbitration, to request
interim measures, or to confirm or set aside an award. The parties shall be
entitled to engage in reasonable discovery, including requests for the
production of relevant documents. Depositions in excess of three per party may
be ordered by the arbitrator(s) only upon a showing of need.
SCHEDULE 9.01(b)
CONVEYED RIGHTS
None
SCHEDULE 9.01(C)
CLAIMS
None