Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit 10.8
------------
INTERNATIONAL RESELLER AGREEMENT
This International Reseller Agreement ("Agreement") dated as of July 31,
1998 (the "Effective Date"), is by and between Engage Technologies, Inc., with
offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇
("Engage") and Engage Technologies Japan, Inc., with offices at Hitotsubashi ▇-
▇-▇, ▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇, ▇▇▇▇▇ 100-8601, formerly known as Sumisho Mineral
Resources Development Co., Ltd. ("Reseller").
WHEREAS, Reseller is a joint venture in which Sumitomo Corporation ("SC")
will hold a 51% ownership interest and Engage will hold a 49% ownership interest
formed for purposes of pursuing business opportunities in the territory of Japan
through distribution and commercialization of certain Engage products in
accordance with the Letter of Intent executed by the parties dated on or about
June 18, 1998.
NOW, THEREFORE, for and in consideration of the mutual promises contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Definitions.
-----------
"End User" means any person or entity in the Territory that uses a Product
--------
solely for its own internal purposes within the Territory and does not further
distribute, resell, license, sublicense, use as a Service Bureau, or otherwise
convey to any other person or entity the Product, in whole or in part, or any
rights in the Product.
"End User License" means an end user license substantially similar to
----------------
Engage's End User License as modified by the terms of this Agreement, as such
Engage's End User License may be modified by Engage from time to time, that
accompanies a Product and grants an End User a limited right to use the
Product,. Engage's current forms of End User License are attached hereto as
Exhibit A.
----------
"Pilot Program License" means a pilot program license substantially similar
---------------------
to Engage's Pilot Program License as modified by the terms of this Agreement, as
such Engage's Pilot Program License may be modified by Engage from time to time,
that accompanies a Product and grants a prospective End User a limited right to
use the
1
Product for a limited period of time solely for trial or evaluation purposes.
Engage's current form of Pilot Program License is attached hereto as Exhibit B.
----------
"Maintenance Services Agreement" has the meaning set forth in Section
------------------------------
2.4.6.
"Marks" has the meaning set forth in Section 6.
-----
"Products" shall have the meaning as defined in the Shareholders Agreement.
--------
"Service Bureau" means a person or entity that uses a Product for the
--------------
benefit of third parties where such person or entity receives in return anything
of value.
"Shareholders Agreement" means the Shareholders Agreement in relation to
----------------------
the Reseller of even date herewith between Engage and SC.
"Territory" means Japan.
---------
"Territory List Price" means Engage's retail price list for Products
--------------------
localized for the Territory.
"Update" means any (i) update, version, release, revision code, patch, bug
------
fix or modified form of a Product that Engage will make available at no
additional charge to licensees of a Product pursuant to this Agreement or any
other agreement between Engage and Reseller or SC in relation to maintenance
services or otherwise, and (ii) versions of the Products localized for the
Territory pursuant to the Maintenance Services Agreement, the Shareholders
Agreement or any other agreement between Engage and Reseller or SC.
"U.S. List Price" means Engage's North America retail price list for the
---------------
Products.
"WarrantyDefect" has the meaning set forth in Section 2.4.7.
--------------
"WarrantyPeriod" has the meaning set forth in Section 2.4.7.
--------------
2. Distribution of Products.
------------------------
2.1 Grant of Rights. Subject to the terms of this Agreement, Engage
---------------
grants Reseller an exclusive non-transferable right (except as provided in
Clause 22.2 of the Shareholders Agreement), with the right to grant sublicenses
as provided in Section 2.2, solely in the Territory to: (i) market, distribute
and sell licenses to use the Products directly to End Users; (ii) sell
prospective End Users Pilot Program Licenses to use the Products; (iii) use the
Products internally solely at Reseller's principal sales office for purposes of
(a) providing maintenance and support services, and (b) demonstrating the
2
operation and capabilities of the Products to prospective End Users and
subdistributors; (iv) make a reasonable number of copies of the Products solely
for purposes of internal back-up; and (v) use the Marks, as permitted in Section
6, for purposes of marketing, distributing and selling licenses to use the
Products. Reseller shall not authorize or appoint any third party as a
subdistributor or other sales agent with respect to the Products except as in
accordance with Section 2.2.
2.2 Subdistributors. With the prior written consent of Engage (which
---------------
shall not be unreasonably withheld), Reseller may sublicense its rights under
Section 2.1 to subdistributors to further the objectives set forth in this
Agreement; provided that each such subdistributor agrees to perform the duties
set forth in this Agreement listed below. Reseller shall notify Engage in
writing of its intention to appoint any such subdistributor and the
subdistributor's proposed territory, and provide with such notification a full
description of the proposed appointee, including without limitation a
description of its existing territory, facilities, management, sales and
marketing personnel, clientele, product lines, including products which might be
competitive with the Products, financial resources, reputation in the
marketplace, and any other factors relevant to the capability of such appointee
to effectively market and service the Products in the Territory. Reseller shall
execute an agreement with each subdistributor under which the subdistributor is
obligated to comply with the provisions set forth in this Agreement to the
extent applicable, including without limitation those set forth in Sections 2.3,
2.4, 5, 6, 7, 9.1, 10.2 and 11-13. In addition, such agreement shall provide
that (i) termination or expiration of this Agreement shall automatically
terminate such agreement, and (ii) each subdistributor shall provide Reseller
with the records and right of inspection set forth in Section 4.4. Reseller
shall at all times during the term of this Agreement use best efforts to ensure
that each subdistributor complies with the terms of said agreement. If Reseller
becomes aware of any violation of the agreement, it will immediately notify
Engage, and Reseller shall take all reasonable steps as directed by Engage to
stop such violation and/or terminate such agreement. Reseller shall remain
primarily responsible to Engage for all of its subdistributors' activities. All
ordering of Products from Engage shall be made by Reseller only pursuant to
Section 3. Notwithstanding anything in this Agreement to the contrary, no
subdistributor shall have the right to grant sublicenses with respect to the
rights in Section 2.1.
2.3 Restrictions. Reseller will not (and will not allow any third party
------------
to) (i) reverse engineer or attempt to discover any source code or underlying
ideas or algorithms of a Product, (ii) modify, translate, or otherwise create
"Derivative Works" (as defined at 17 U.S.C. Section 101) of a Product, (iii)
incorporate or embed a Product, in whole or in part, into another product or
other computer software code, (iv) reproduce or otherwise manufacture a Product,
(v) provide, lease, lend, or use a Product for timesharing or Service Bureau
purposes, (vi) allow the removal, alteration, covering or obscuring of any
copyright notice or any other notice or ▇▇▇▇ that appears on a Product, on any
copies, or any media, or (vii) copy a Product, except as expressly
3
permitted herein. Reseller shall not solicit or accept any order for Products
from a person or entity located outside of the Territory. Reseller shall be
fully responsible for the actions of each of its employees and independent
contractors with respect to the proper use and protection of the Products. All
rights not expressly granted to Reseller herein are reserved by Engage. There
are no implied rights.
2.4 Reseller's Duties.
-----------------
2.4.1 Marketing Efforts. Reseller shall use its best efforts to
-----------------
promote the distribution and use of the Products solely in the Territory.
Reseller shall have full freedom to establish the price for the Products.
2.4.2 Organization. Reseller shall maintain a sales organization of
------------
sufficient size and qualifications to promote the sale of the Products
throughout the Territory.
2.4.3 End User Licenses. Reseller shall not distribute a Product
-----------------
unless the recipient of the Product has signed and delivered to Reseller an End
User License (for Products distributed pursuant to Section 2.1(i)) or a Pilot
Program License (for Products distributed pursuant to Section 2.1(ii)).
Reseller shall sell, price and enforce licenses to use the Products in
accordance with any restrictions set forth in the applicable End User License
with respect to the permitted number of seats, users, transactions, domain names
or other specified parameters.
2.4.4 Enforcement of Licenses. Reseller shall use its best efforts
-----------------------
to enforce the terms of the End User License or Pilot Program License
accompanying the Products and inform Engage of any breach of such terms of which
Reseller becomes aware. Reseller shall not make any representations, warranties,
or other statements regarding the Product to any third party other than those
contained in the documentation supplied by Engage with the Product.
2.4.5 Marketing Materials. Reseller shall submit to Engage for
-------------------
review any advertising, promotional or instructional materials relating to the
Products (other than materials supplied by Engage) including translations of
Engage-provided materials, and shall not publish or distribute any such
materials without Engage's prior written approval. Reseller further agrees that
Engage shall own all rights to and interests in any translation of Engage-
supplied materials and shall undertake any necessary action to perfect such
rights and interests. All such materials shall remain the sole and exclusive
property of Engage.
2.4.6 Installation and Maintenance Services. Reseller shall be
-------------------------------------
solely responsible for providing maintenance and support services to its End
Users and subdistributors, except as otherwise agreed upon between Engage and
Reseller or SC.
4
Engage shall have no obligation under this Agreement to provide Reseller or
its End Users any maintenance or support services. Reseller may elect to
purchase maintenance and support services from Engage pursuant to a separate
maintenance services agreement (the "Maintenance Services Agreement"); in such
event, Engage shall be responsible for providing such services only to Reseller
pursuant to the terms and conditions of such agreement. For avoidance of doubt,
the foregoing shall not prejudice Engage's obligation to provide the warranty
obligations in relation to the Products as set forth in Section 2.4.7.
2.4.7 Warranty Services. Reseller shall evaluate and process all
-----------------
warranty claims of End Users during the "Warranty Period" (one hundred twenty
(120) days from the date of delivery of the Products to the End User). Reseller
shall use its commercially reasonable best efforts to determine whether problems
with the Products are due to (i) user or operational error, (ii) a defect in the
Product media, or (iii) a Product Error or other failure to meet the warranties
set out in Section 11.1 (such Errors and failures are defined herein as
"Warranty Defects"). Reseller shall use its commercially reasonable best
efforts to resolve with End Users all user and operational errors. If problems
are attributable to defective media, Engage shall, as soon as practicable,
supply replacement Products at no cost to Reseller. If Reseller believes that
user problems are due to Warranty Defects, it shall promptly report this fact to
Engage and Engage shall make its best endeavors to remedy such Warranty Defects
pursuant to Section 2.5.2 and Section 11.1.
2.4.8 Governmental Registrations, Import Permit, Taxes and Duties.
-----------------------------------------------------------
Reseller shall be responsible, at its own expense, for obtaining all (i)
governmental registrations in the Territory required for the performance of this
Agreement (and shall provide translated copies of related documents to Engage),
and (ii) necessary export and import permits and certificates. Reseller shall
pay any and all taxes and duties imposed on the delivery of the Products.
2.4.9 Leads. Reseller agrees to advise Engage promptly of any
-----
license leads or potential customers for the license of the Products outside of
the Territory.
2.4.10 Competitive Products. Reseller shall not, except with
--------------------
Engage's prior written consent, either directly or indirectly through a third
party, promote, market, sell, distribute, support or maintain any software
reasonably deemed by Engage to be similar to and competitive with a Product.
2.5 Engage Duties.
-------------
2.5.1 Warranty Support. Engage shall make its best endeavors to
----------------
remedy any Warranty Defects reported to it during the Warranty Period, and to
supply
5
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
replacement Products to Reseller in exchange for Products that fail to meet
warranted performance during the Warranty Period because of such Warranty
Defects.
2.5.2 Promotional Literature. At Reseller's request, Engage shall
----------------------
supply without cost to Reseller an initial allotment of Engage's standard
promotional literature (which are written in the English language) for each of
the Products, in accordance with Engage's standard policies. Engage agrees upon
request to provide additional copies of such promotional literature at Engage's
standard rates.
2.5.3 Product Changes. Engage reserves the right to modify or
---------------
discontinue any Product, or version or release of a Product, at any time upon
forty-five (45) days prior notice to Reseller.
2.5.4 Price Changes. If, at any time during the term of this
-------------
Agreement, Engage determines to change the price or specifications of the
Products, the price of training or the terms of its End User License or Pilot
Program License, [**] such change may have on the operation of Reseller. If, as
a result of such a change to any Product or the release of a new version of any
Product, [**]. Without prejudice to the foregoing obligations of Engage, Engage
will [**] thereof and terms of the standard forms.
3. Ordering and Delivery.
---------------------
Reseller shall place all orders for Products directly with Engage. Engage
shall accept or reject each such order in its sole discretion. All orders shall
be deemed subject to the terms of this Agreement and shall specify the Products,
the quantity ordered, the discounted price, the platform, and such other
information as Engage may reasonably request. Any different or additional terms
of any purchase order, confirmation, or similar form even if signed by the
parties after the Effective Date shall have no force or effect. All orders are
binding upon Engage's written confirmation or shipment. All shipments are FOB
Engage's designated shipping facility and shall be deemed accepted by Reseller
upon delivery.
4. Fees; Payments Terms.
--------------------
4.1 Initial Purchase. Reseller shall pay Engage in advance for Reseller's
----------------
anticipated initial purchases of localized Products in the amount of up to[**].
Engage shall invoice Reseller on a monthly basis for amounts equal to the [**]
of Engage's cost of localizing the Products, and Reseller shall pay amounts so
invoiced in accordance with Section 4.3.
6
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
4.2 Pricing and Payment. Reseller shall pay Engage [**] of the price set
-------------------
forth on the then current U.S. List Price for each English-language Product
purchased, and [**] of the price set forth on the then-current Territory List
Price for each localized Product purchased. Engage may, at its sole discretion,
modify any of its prices for Products or training services at any time [**].
4.3 Payment Terms. Except as expressly provided otherwise, all payments
-------------
hereunder shall be made in U.S. dollars within thirty (30) days of the date of
Engage's shipment F.O.B. Andover, Massachusetts. Reseller shall pay all
applicable shipping charges, duties, assessments and taxes (exclusive of taxes
on Engage's net income). Any payments more than thirty (30) days overdue will
bear a late payment fee of 1.5% per month, or, if lower, the maximum rate
allowed by law.
4.4 Records; Inspection. Reseller shall provide Engage with a written or
-------------------
electronic monthly report, in a mutually agreed upon format, which report shall
be sufficient to verify the sale, license and transfer of Products and revenue
received or invoiced (including names and addresses of End Users and
subdistributors). Upon Engage's request, at mutually agreeable times, but in no
event later than fifteen (15) days following Engage's request, Engage or an
agent or accounting firm chosen by Engage shall be provided reasonable access
during normal business hours to the records of Reseller for purposes of audit of
fees, if any, due and may make copies of such records. In addition, Reseller
will cooperate with Engage's reasonable request for Reseller to make such
inspection with respect to a subdistributor. Engage shall be provided a
reasonable opportunity to interview Reseller's End Users and subdistributors and
any employees who have engaged in the marketing related to the Products in order
to corroborate the information contained in such records. If any such audit
reveals an underpayment of more than 5% with respect to amounts due in any
fiscal quarter of Reseller, Reseller shall pay the cost of Engage's audit.
5. Proprietary Rights
------------------
For purposes of this Agreement only, as between the parties, Engage and its
suppliers have and shall retain all right, title and interest in and to the
Products (subject to the licenses granted herein), all copies and Derivative
Works thereof (including revisions, Updates, versions and releases), and all
other materials, including intellectual property rights therein, subject to the
rights and licenses granted to NEWCO and other restrictions as mutually agreed
upon in the Sharehoders Agreement or other Related Agreements.
7
6. Trademark License.
-----------------
Engage hereby grants to Reseller the right in the Territory during the term
of this Agreement to use Engage's names, marks, logos, and other identifiers for
the Products ("Marks") only on or in connection with the Products and Reseller's
advertising for the Products, provided that Reseller shall: (i) only use the
Marks in the form and manner, and in accordance with the quality standards, that
Engage prescribes (and which it may change from time to time); (ii) at Engage's
request, submit samples of packaging and advertising to Engage for approval;
(iii) upon termination of this Agreement for any reason, immediately cease all
use of the Marks. All goodwill associated with Engage's Marks and Reseller's
use of such Marks shall inure to Engage. Reseller shall not contest the
validity of, use, register or attempt to register, or take other action with
respect to any name, logo, trademark, service ▇▇▇▇, or other identifier used
anywhere in the world by Engage (or a ▇▇▇▇ confusingly similar thereto), except
to the extent authorized in writing by Engage in advance. Reseller's use of the
Marks shall clearly identify Engage as the owner of the Marks. Reseller shall
immediately notify Engage of any potential infringement of a ▇▇▇▇ of which
Reseller becomes aware.
7. Confidentiality.
---------------
7.1 Confidential Information. The parties acknowledge and agree that
------------------------
during the course of performing their respective duties under this Agreement,
the parties may exchange confidential and proprietary information ("Confidential
Information"). Confidential Information shall include, without limitation, the
terms of this Agreement, customer lists, the source code form of the Products,
trade secrets, product plans and schedules, new product information, technical
data and know-how, instructional and operating manuals, financial information,
marketing and sales data and plans, and other oral and written information.
Each party acknowledges that the Confidential Information of the other party
constitutes valuable trade secrets of that party. Each party agrees, therefore,
to preserve the confidential nature of the other party's Confidential
Information by retaining such Confidential Information in strict confidence and
using such Confidential Information only as required to perform hereunder. Each
party agrees to promptly report to the other party any violations of these
provisions by its employees, consultants, or agents of which they are aware.
Except as expressly permitted under this Agreement, neither party shall use,
copy, make, modify, display or transmit the Confidential Information, in whole
or in part, or cause or permit any third party to do so, without the prior
written consent of the other party. A party shall have no duty of
confidentiality under this Section 7 with respect to information the receiving
party can document: (a) is or has become readily publicly available without
restriction through no fault of the receiving party or its employees or agents;
(b) is received without restriction from a third party lawfully in possession of
such information and lawfully empowered to disclose such information; (c) was
rightfully in possession
8
of the receiving party without restriction prior to its disclosure by the other
party; (d) was independently developed by the receiving party without access to
such Confidential Information; or (e) was required to be disclosed by a court or
other governmental authority after reasonable notice is given to the other
party.
7.2 Equitable Relief. If either party breaches any obligation with
----------------
respect to the use or confidentiality of the Confidential Information, the other
party shall be entitled to equitable relief to protect its interests therein,
including without limitation preliminary and permanent injunctive relief in
addition to any other remedies it may have.
8. Term and Termination.
--------------------
8.1 Term. This Agreement shall commence as of the Effective Date and,
----
unless sooner terminated as set forth in Section 8.2, continue indefinitely.
8.2 Termination.
-----------
8.2.1 Termination by Engage. If SC has not, on or prior to August
---------------------
31, 1998, (i) satisfied the conditions of Sections 2.2 and 2.3 of the
Shareholders Agreement relating to the Reseller between Engage and SC (the
"Shareholders Agreement") and (ii) consummated an equity investment in Engage of
no less than $1,500,000 due to a reason solely attributable to SC, then this
Agreement may be terminated by Engage at any time thereafter upon thirty (30)
days written notice.
8.2.2 Termination for Cause. Either party may, at its option,
---------------------
terminate this Agreement if (i) the other party materially breaches a material
provision of this Agreement, (ii) such party gives the other party written
notice of such material breach (the "Default Notice") stating such party's
intention to terminate this Agreement, (iii) the other party fails to correct
such breach within thirty (30) days following its receipt of the Default Notice,
and (iv) such party gives the other party written notice of termination of this
Agreement, which termination will be effective upon its receipt.
8.2.3 Termination for Financial Distress. In the event that either
----------------------------------
party files a petition in bankruptcy, or has such a petition filed against it
that is not dismissed within thirty (30) days after filing, or is placed in a
receivership or reorganization proceeding or is placed in a trusteeship
involving an insolvency, or ceases doing business in the ordinary course, this
Agreement automatically shall terminate.
8.2.4 Additional Termination Rights. Engage may elect to terminate
-----------------------------
this Agreement immediately upon notice to Reseller in the event that (i) the
Shareholders Agreement is terminated for a reason not attributable to Engage, or
(ii) the Reseller is liquidated or dissolved for any reason, in which case
termination of this Agreement shall
9
be effected immediately prior to the Reseller's duly authorized decision to
liquidate or dissolve and otherwise in such a manner as to comply with
applicable law and the objective of this Section 8.2.4.
8.2.5 Nonexclusive Remedy. Termination is not an exclusive remedy
-------------------
and all other remedies will be available whether or not termination occurs.
8.2.6 Refund of Prepayment. In the case of the Agreement being
--------------------
terminated due to a reason solely attributable to Engage, Engage shall refund to
Reseller the prepayment for any localized Products not yet delivered at the time
of such termination.
9. Effect of Termination.
---------------------
9.1 Consequences. Upon expiration or termination of this Agreement for
------------
any reason: (i) all licenses and other rights granted to Reseller under this
Agreement will become null and void; (ii) each party will return all tangible
embodiments of Confidential Information, catalogs and sales literature in its
possession or control, or at the other party's option, destroy such materials
and provide the other party with a certificate signed by an executive officer
attesting to the destruction thereof; (iii) all outstanding obligations or
commitments of either party to pay amounts to the other party, if any, will
become immediately due and payable; and (iv) for any order of Products received
but not shipped at the time of termination, Engage shall have the option to
cancel the order or fulfill the order in the case of the Agreement being
terminated due to the reason attributable to Reseller. Each party understands
that the rights of termination hereunder are absolute. Notwithstanding the
foregoing, upon the expiration or termination of this Agreement (but not in the
event of termination of this Agreement due to a breach by Reseller), (a) if
Reseller has acquired Products under this Agreement remaining in its inventory,
Reseller may for six (6) months sell such Products under the provisions of this
Agreement, or, upon the mutual agreement of the parties, return such Products
for credit, and (b) Reseller may retain and use internally, solely for purposes
of providing maintenance and support services to End Users, a copy of each
Product for which Reseller is contractually obligated, as of the effective date
of termination or expiration, to provide such services; provided, however, that
(y) the foregoing right shall terminate with respect to each Product upon the
earlier of (A) expiration of the last such End User agreement and (B) one (1)
year from the expiration or termination of this Agreement, and (z) Engage shall
have no obligation to provide Reseller or its End Users with any maintenance or
support services.
9.2 No Separation Compensation. Under no circumstances shall Engage be
--------------------------
liable to the Reseller or any of its subdistributors by reason of termination,
expiration or nonrenewal of this Agreement for indemnification, compensation,
reimbursement, or damages for loss of prospective compensation, goodwill or loss
thereof, or expenditures,
10
investments, leases, or any type of commitment made in connection with the
business of such party or in reliance on the existence of this Agreement
including, but not limited to advertising and promotion costs, costs of
supplies, termination of employees, employee salaries, and other such costs and
expenses.
10. Indemnification.
---------------
10.1 Indemnification of Reseller. Engage shall, at its expense,
---------------------------
indemnify, hold harmless and defend Reseller from and against any and all
damages, costs and expenses, including reasonable attorneys' fees, incurred by
Reseller in connection with (a) a claim that a Product, as delivered by Engage
and used by Reseller within the scope of this Agreement, infringes any
copyright, (b) a prohibition or restriction on Reseller's exercise of any right
granted in Section 2 hereof during the term of this Agreement other than those
prohibitions or restrictions set forth in this Agreement (or any other agreement
between the parties); provided that Reseller notifies Engage promptly in writing
of the infringement claim and Engage has sole control over the defense or
settlement of such claim and Reseller, at its expense, provides reasonable
assistance in the defense of the same. Notwithstanding the foregoing, in the
event that an infringement is found and continued use of a Product is enjoined,
Engage will, at its option and expense, either: (i) procure for Reseller the
right to continue to use the Product; (ii) modify or alter the Product so that
it becomes non-infringing; or (iii) replace the Product with a non-infringing
alternative. If all of these options may only be exercised by Engage at an
unreasonable cost, then Engage may require Reseller to immediately cease all use
and distribution of the Product and terminate the End User Licenses granted
under this Agreement and pay to the Reseller the Product purchase fees that
Reseller paid to Engage, less a portion for prior usage, amortized over a 3 year
period.
Engage shall have no obligation to indemnify Reseller with respect to any
claim based upon (i) any modification of a Product by a party other than Engage;
(ii) the combination, operation or use of the Product with a non-Engage software
program or data if the claim would have been avoided had such combination,
operation or use not occurred; or (iii) the use of other than the latest release
of a Product, if such claim could have been avoided by use of the latest
unmodified release, which release is provided by Engage to Reseller pursuant to
the terms of the Maintenance Services Agreement. Engage's obligation to
indemnify Reseller will be reduced to the extent the damages could have been
reduced by Reseller's use of the latest release.
10.2 Indemnification of Engage. Reseller shall, at its expense,
-------------------------
indemnify, hold harmless and defend Engage from, and against any and all
damages, costs and expenses including reasonable attorneys' fees, incurred by
Engage in connection with any claim (i) against Engage by an End User which
relates to such End User's relationship with Reseller or a subdistributor (and
not to any direct relationship which Engage may have with such End User), (ii)
described in clauses (i) through (iii) of Section 10.1 above, (iii)
11
arising from the performance of a Product or maintenance and support services
rendered or required to be rendered in connection with the distribution of a
Product to an End User, except, if Reseller has purchased maintenance and
support services from Engage, as may be attributed to Engage's failure to render
such maintenance and support services to Reseller, or (iv) any representation,
promise, guarantee or warranty made or implied by Reseller or a subdistributor
to the extent it exceeds or differs from those expressly set forth in the
documentation accompapying a Product, EXCEPT as may be attributed to Engage's
failure to meet the representations, warranties, covenants or other agreements
herein or in the Shareholders Agreement.
10.3 Use of Engage Name. The rights and obligations contained in Section
------------------
12 of the Shareholders Agreement shall apply in relation to the Products as if
they were set forth in full herein for the benefit of Reseller.
11. Warranty and Disclaimer.
-----------------------
11.1 Warranty of Authority. Engage represents and warrants that it
---------------------
possesses the rights in the Products to perform its obligations hereunder. The
representations, warranties and covenants contained in Clauses 22.2 and 22.4 of
the Shareholders Agreement shall apply in relation to the Products as if they
were set forth in full herein for the benefit of Reseller.
11.2 DISCLAIMER OF WARRANTIES. OTHER THAN THE WARRANTIES MADE TO RESELLER
------------------------
CONTAINED OR REFERENCED HEREIN, ENGAGE MAKES NO WARRANTIES OR REPRESENTATIONS AS
TO ANY PRODUCT OR AS TO ANY SERVICES RENDERED TO RESELLER OR ANY OTHER PERSON.
ENGAGE RESERVES THE RIGHT TO CHANGE ITS PRODUCT WARRANTY AND SERVICE POLICIES AT
ANY TIME, WITHOUT FURTHER NOTICE AND WITHOUT FURTHER LIABILITY TO RESELLER OR
ANY OTHER PERSON SUBJECT TO THE CONSENT OF RESELLER WHICH CONSENT WILL NOT BE
UNREASONABLY WITHHELD. EXCEPT AS SET FORTH ABOVE, AND TO THE EXThNT PERMITTED
BY APPUCABLE LAW, ENGAGE DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES, ORAL OR
WRITTEN, INCLUDING BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT AND ANY WARRANTIES ARISING
FROM COURSE OF DEALING, COURSE OF PERFORMANCE OR USAGE OF THE TRADE.
11.3 Acknowledgement. Reseller acknowledges that the Products have not
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been prepared to meet the individual requirements of Reseller or its End Users.
It is the responsibility of Reseller and its End Users to ensure that the
functions and facilities performed by a Product meet the End User's
requirements.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omssions.
12. Limitation of Liability.
-----------------------
NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR OTHERWISE, NEITHER
ENGAGE NOR ITS AFFILIATES SHALL BE LIABLE OR OBLIGATED WITH RESPECT TO THE
SUBJECT MATTER OF THIS AGREEMENT OR UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR (I) ANY AMOUNTS IN EXCESS IN
THE AGGREGATE OF THE FEES PAID TO IT HEREUNDER OR IN THE PRODUCT PURCHASE
AGREEMENT (AS DEFINED IN THE SHAREHOLDERS AGREEMENT); OR (II) SPECIAL,
CONSEQUENTIAL, INCIDENTAL RELIANCE, EXEMPLARY, OR INDIRECT DAMAGES (INCLUDING
SUCH DAMAGES DUE TO LOSS OF DATA, PROFITS, OR COMPUTER FAILURE) EVEN IF ENGAGE
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
13. Export Control.
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Reseller shall comply with all applicable export laws and restrictions.
14. Miscellaneous.
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14.1 Assignment. Reseller shall not assign this Agreement (by operation
----------
of law or otherwise), or any rights or obligations hereunder, without the prior
written consent of Engage (and any attempt to do so shall be null and void).
14.1.1 [**] Rights. Pursuant to a [**] Engage granted [**] a
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worldwide, non-exclusive right to market and distribute certain of Engage's
products. If [**] exercises its right to market and distribute such products in
the Territory, Engage shall use its best efforts (which shall not require Engage
to make any associated payment [**]) to cause [**] of the Reseller in the
Territory with respect to such products. If [**] to the Reseller in the
Territory, then with respect to each such product sold by [**] in the Territory
during the term of this Agreement Engage shall pay to the Reseller an amount
equal to [**] of the price paid by each customer [**]. To the extent permitted
by the terms of the [**] Agreement, Engage shall provide the Reseller with
records and other data regarding [**] sales of such products in the Territory to
the extent necessary for calculation of fees owed by Engage to the Reseller
under this Section.
14.1.2 Successors and Assigns. Subject to the limitations above,
----------------------
this Agreement will mutually benefit and be binding upon the parties, their
successors and assigns.
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14.2 Waiver. No waiver of any portion of this Agreement shall be
------
effective unless in writing. The failure of a party at any time to require
performance by the other party of any provision shall in no way affect the right
of such party to enforce that or any other provision of this Agreement. No
waiver of any breach of this Agreement shall constitute a waiver of any
subsequent breach of the same or any other provision of this Agreement.
14.3 Notices. All notices given pursuant to this Agreement shall be in
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writing sent prepaid by certified or registered mail or overnight express
service, with return receipt requested in each case. All notices sent by
certified mail shall be effective three days after being sent out provided that
a facsimile copy is contemporaneously sent. Notices sent by overnight express
service shall be effective as of the first business day following submission to
the overnight express delivery service. All such notices shall be directed to
the respective parties at the addresses set forth on the first page of this
Agreement unless either party notifies the other in writing of a new address.
14.4 Law and Jurisdiction. This Agreement shall be governed and
--------------------
interpreted in all respects by and according to the laws of the Commonwealth of
Massachusetts, U.S.A., excluding its choice of law provisions. It is the
express intent and agreement of the parties that the United Nations Convention
for the International Sale of Goods shall not apply to this Agreement or to
purchase orders thereunder. This Agreement is written in the English language
14.5 Disputes. Any dispute, controversy or difference which may arise
--------
among the parties out of or in relation to or in connection with this Agreement
or for the breach thereof shall be amicably settled by consultation among the
parties. All such disputes, controversies and differences, if not settled
amicably, shall be finally settled by arbitration pursuant to the Rules of
Conciliation and Arbitration of the International Chamber of Commerce by three
arbitrators appointed in accordance with the said rules. In the event that the
arbitration is sought by Engage, the arbitration shall be held in Tokyo, Japan.
In the event that the arbitration is sought by Reseller, the arbitration shall
be held in Boston, Massachusetts, U.S.A. The arbitration shall be in the
English language. Notwithstanding the foregoing, each party shall have the
right to institute judicial proceedings against the other party or anyone acting
by, through or under such other party in order to enforce the instituting
party's rights hereunder through reformation of contract, specific performance,
injunction or similar equitable relief.
14.6 Compliance With Law. Each party shall at all times during the term
-------------------
of this Agreement perform its duties hereunder in accordance with all local,
state, federal and international laws and regulations, including without
limitation the Foreign Corrupt Practices Act of the United States. Reseller
shall take all actions that are reasonably required to ensure that this
Agreement and the transaction contemplated hereby comply
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with all applicable laws, regulations, rules or other legal and administrative
requirements in the Territory.
14.7 Independent Contractor. Reseller agrees that it is an independent
----------------------
contractor and that this Agreement and relations between Engage and Reseller
hereby established do not constitute a joint venture, agency or contract of
employment between them, or any other similar relationship. Neither party has
the right or authority to assume or create any obligation or responsibility on
behalf of the other.
14.8 Severability. If any provision of this Agreement shall be adjudged
------------
by any court of competent jurisdiction to be unenforceable or invalid, that
provision shall be limited or eliminated to the minimum extent necessary so that
this Agreement shall otherwise remain in full force and effect and enforceable.
14.9 English. This Agreement has been drafted and executed in the English
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language. In the event of any ambiguity between the English language version
and any translation into any other language, the meaning and intent contained in
the English language version shall prevail
14.10 Entire Agreement. This Agreement, including Exhibits A and B
---------------- ----------------
attached hereto, constitutes the complete and exclusive statement of the mutual
understanding of the parties relating to the subject matter hereof, and
supersede and cancel all previous written and oral agreements and communications
relating to the subject matter of this Agreement and said agreements.
14.11 Section Headings. Section headings are for convenience only and
----------------
shall not be considered in the interpretation of this Agreement.
14.12 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. It shall not be a
condition to effectiveness that each party shall have executed the same
counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized representatives as of the date first
written above.
ENGAGE TECHNOLOGIES, INC. ENGAGE TECHNOLOGIES JAPAN, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------- -----------------------------
Title: CEO Title: President
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