EXHIBIT 10.1
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY
FILED HEREWITH OMITS THE INFORMATION SUBJECT TO THE CONFIDENTIALITY REQUEST.
OMISSIONS ARE DESIGNATED BY ***. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
THIS AGREEMENT is made the 20th day of June, 2006
B E T W E E N

(1)   ARKONA INC a company incorporated in Delaware with its principal offices
at 10757 South Riverfront Parkway, Suite 400, South Jordan, Utah 84095, USA (the
“Company”); and   (2)   MCL GROUP LIMITED, Company Number 00430530, whose
registered office is at 77 Mount Ephraim, Tunbridge Wells, Kent TN4 8BS, (the
“Distributor”).

RECITALS

(A)   The Company is the proprietor of certain dealer management software known
as “the Arkona Dealer Management Suite”.   (B)   The Company has agreed to
appoint the Distributor as its exclusive distributor to distribute and
sub-license such software and its associated documentation in the Territory (as
hereinafter defined) on the terms and conditions hereinafter contained.   (C)  
The Company and the Distributor have entered into this Agreement in the spirit
of mutual collaboration and with the aim of furthering their joint interests.

NOW IT IS HEREBY AGREED as follows:

          1.   DEFINITIONS AND INTERPRETATION
 
        1.1   In this agreement (the “Agreement”), unless the context otherwise
requires, the following expressions have the following meanings:
 
       
 
  “Acceptance Date”   means the date of Formal Acceptance of the UK Core
Software pursuant to Clause 9;
 
       
 
  “Affiliate”   in respect of any Party, means any subsidiary of that Party and
each subsidiary thereof (the term ‘subsidiary’ having the meaning given in
section 736 of the Companies Act 1985);
 
       
 
  “Business Day”   means a day other than a Saturday, Sunday or a public holiday
in the United Kingdom or the United States;

1

--------------------------------------------------------------------------------

 

         
 
  “Confidential Information”   means this Agreement and all information obtained
by one Party from the other pursuant to this Agreement, whether in writing,
orally, or through observation, that (1) is expressly marked as confidential, or
(2) is manifestly of a confidential nature, or (3) if orally presented, is
identified as confidential at the time of disclosure and is confirmed in writing
to be confidential within 7 days of its disclosure;
 
       
 
  “Customer Relationship Management Product”   means an application being fully
integrated with UK Core Software and including functions for customer contact
information, dealership daily work plans and other activity scheduling, showroom
sales-process management, realtime analysis of showrooms sales-process
statistics, prospect analysis and database marketing;
 
       
 
  “Distributor Software”   means any and all software developed by or on behalf
of the Distributor which interfaces with the UK Core Software, but excludes
(1) the UK Core Software, and (2) any software developed for the Distributor by
the Company;
 
       
 
  “End-User”   means a person who licences the use of the End-User Software from
the Distributor pursuant to the terms of an End-User Agreement (and reference to
“a person” means a company, partnership, body corporate or sole trader);
 
       
 
  “End-User Agreement”   means a software licence and support agreement entered
into by the Distributor or an Affiliate and an End-User and containing such
terms as are required by Clause 10, and otherwise as the Distributor may in its
sole discretion determine;
 
       
 
  “End-User Software”   means the UK Core Software (or any portion thereof) and
the Modifications, whether distributed alone or in combination with any
Distributor Software;
 
       
 
  “Escrow Agent”   means Escrow Tech International Inc. of C7 Data Center
Building, 330 South 520 West Suite 230, Lindon UT 84042, United States of
America;
 
       
 
  “Escrow Agreement”   means an escrow agreement in the form detailed in
Appendix A hereto;

2

--------------------------------------------------------------------------------

 

         
 
  “Formal Acceptance”   in relation to the UK Core Software or any
Modifications, means formal acceptance of such software by the Distributor in
accordance with Clause 9.4;
 
       
 
  “Intellectual Property Rights”   means patents, patent applications, and
patent rights; copyrights, copyright applications, and copyright registrations;
trademarks, trademark applications, trademark registrations, and trademark
rights; trade secrets; and all other intellectual property and proprietary
information rights as may exist now or hereafter come into existence; all
modifications, continuations, renewals, and extensions of any of the foregoing;
and all claims, actions, causes of action, damages, costs, expenses, profits,
penalties, recoveries, and remedies relating to any past, present, or future
infringement of any of the foregoing; arising under the laws of England, the
laws of the United States, or the laws of any other country, state, or
jurisdiction in the world;
 
       
 
  “Licence Fees Revenue”   means with regard to an End-User the software licence
fees, excluding value added taxes, received by the Distributor from that
End-User under the terms of its End-User Agreement;
 
       
 
  “Location”   means the head office of the Distributor from time to time which,
as of the date of this Agreement, is at 77 Mount Ephraim, Tunbridge Wells, Kent
TN4 8BS;
 
       
 
  “Maintenance Release”   means a release of the Software by the Company which
corrects faults, adds functionality, or otherwise amends or upgrades the
Software, but which does not constitute a New Version;
 
       
 
  “Maintenance Services”   means the maintenance services to be provided by the
Company pursuant to the terms of the Service Level Agreement;
 
       
 
  “Mark”   means the ARKONA trade mark, which is registered in the USA as
registration no.2,301,459;
 
       
 
  “Mark Usage Requirements”   means those requirements for the manner in which
the Mark may be used as detailed in Appendix E hereto;

3

--------------------------------------------------------------------------------

 

         
 
  “Modification”   means any addition to, modification of, or deletion from the
substance or structure of: (1) any Software or other Software Materials, (2) any
prior Modifications, or (3) any Source Materials for any of the foregoing. When
any of the foregoing are provided as a series of files, a “Modification” is:
(a) any addition to, modification of, or deletion from the contents of a file
containing any Software or other Software Materials, any prior Modifications, or
any Source Materials for any of the foregoing, or (b) any new file containing
any Software or other Software Materials, any prior Modifications, or any Source
Materials for any of the foregoing;
 
       
 
  “New Version”   means any new version of the Software which from time to time
is publicly marketed and offered for license by the Company in the course of its
normal business, being a version which contains such significant differences
from the previous versions as to be generally accepted in the marketplace as
constituting a new product;
 
       
 
  “Parties”   means each of the Company and the Distributor and “Party” shall
mean either of them as the context may require;
 
       
 
  “Product Description”   means the product description as modified, enhanced or
altered by the Company from time to time of the Software describing the
facilities and functions thereof as supplied to the Distributor by the Company
from time to time in connection with the UK Core Software;
 
       
 
  “Release”   means any Maintenance Release or New Version;
 
       
 
  “Restricted Territories”   means South Africa, Australia, France, Germany,
Italy, Spain, Belgium, The Netherlands, Greece, Luxembourg, Portugal, Sweden,
Switzerland and Norway and “Restricted Territory” shall mean any of such
countries;
 
       
 
  “Quarter Day”   means each of 31 March, 30 June, 30 September and 31 December
in each Year during the continuance of this Agreement;
 
       
 
  “Quarterly Period”   means the period during the continuance of this Agreement
and commencing on the Acceptance

4

--------------------------------------------------------------------------------

 

         
 
      Date and ending on the next occurring Quarter Day and each successive
period commencing on the day immediately following the end of the previous
Quarterly Period and ending on the next Quarter Day;
 
       
 
  “Revenue Share Fee”   means a payment calculated in accordance with
Appendix C, and “Revenue Share Fees” shall be construed accordingly;
 
       
 
  “Services”   means the services to be performed by the Company pursuant to the
terms of this Agreement including the provision of the Maintenance Services;
 
       
 
  “Service Level Agreement”   means the service level agreement in the form
attached to this Agreement at Appendix D;
 
       
 
  “Software”   means the Arkona Dealer Management Suite software and all
modifications, enhancements, versions and replacements thereof and additions
thereto, but excluding any Distributor Software;
 
       
 
  “Software Documentation”   means the operating manuals and other literature
(including any and all marketing material), in an editable format, provided by
the Company to the Distributor from time to time for use by End-Users in
conjunction with the UK Core Software;
 
       
 
  “Software Materials”   means the UK Core Software and any Modifications, the
Product Description, and the Software Documentation;
 
       
 
  “Source Materials”   means any and all logic, logic diagrams, flowcharts,
orthographic representations, algorithms, routines, sub-routines, utilities,
modules, file structures, coding sheets, coding, source codes listings,
functional specifications, program specifications and all other materials and
documents necessary to enable a reasonably skilled programmer to maintain, amend
and enhance the software in question without reference to any other person or
documentation and whether in eye-readable or machine-readable form;

5

--------------------------------------------------------------------------------

 

         
 
  “Specification”   means the specification for each of the Software and the UK
Core Software, each as scheduled at Appendix B;
 
       
 
  “Territory”   means the United Kingdom of Great Britain and Northern Ireland;
 
       
 
  “Test Version”   in respect of the UK Core Software or any Modifications, the
test version of such software to be delivered by the Company to the Distributor
pursuant to the terms of Clause 9.2;
 
       
 
  “Test Date”   has the meaning set out in Clause 9.7;
 
       
 
  “UK Core Software”   means the Software as adapted by the Company for the
Distributor in accordance with Clause 8.1 and made available to the Distributor
pursuant to this Agreement but excluding any Distributor Software;
 
       
 
  “UK Core Software Test Date”   has the meaning set out in Clause 9.5;
 
       
 
  “US$ Equivalent”   means the amount in US dollars of the relevant payment, as
calculated at the spot rate (immediate delivery price) published in the
Financial Times (as produced in London by The Financial Times Limited) and as
determined on the date being the Business Day immediately proceeding the date on
which such payment is made or should have been made in accordance with the terms
of this Agreement;
 
       
 
  “Year”   means any period of 12 months commencing on the date hereof or any
anniversary of the date hereto.

     
1.2
  The Recitals form part of this Agreement and have the same force and effect as
if set out in the body of this Agreement. Any reference to this Agreement
includes the Recitals.
 
   
1.3
  The headings in this Agreement do not affect its interpretation. Save where
the context otherwise requires, references to clauses are to clauses of this
Agreement.
 
   
1.4
  In this Agreement, unless the context otherwise requires:
 
   
1.4.1
  words and expressions which are defined in the Companies Act 1985 have the
same meanings as are given to them in the Companies Act 1985, unless such words
and expressions are expressly defined otherwise in this Agreement;

6

--------------------------------------------------------------------------------

 

     
1.4.2
  references to the Company and the Distributor include their permitted
successors and assigns;
 
   
1.4.3
  references to statutory provisions include those statutory provisions as
amended or re-enacted;
 
   
1.4.4
  references to any gender include all genders; and
 
   
1.4.5
  words in the singular include the plural and in the plural include the
singular.
 
   
2.
  APPOINTMENT
 
   
2.1
  Subject to the terms, conditions, and limitations of this Agreement, the
Company hereby appoints the Distributor, and the Distributor hereby agrees to
act as, the sole and exclusive distributor of the Company to market, distribute,
license, sub-license, support and maintain the Software Materials in the
Territory.
 
   
2.2
  The Company shall not (and shall procure that none of its Affiliates shall) at
any time during the continuance of this Agreement either directly or indirectly
including without limitation through any agents distributors partners
representatives or any third parties license, sub-license, market, distribute or
directly support any part of the Software Materials or the Software anywhere in
the Territory. Nothing in this Clause shall prevent the Company from fulfilling
unsolicited orders received by the Company from any person in the Territory or
in relation to the supply of Software to another EU country.
 
   
3.
  LICENCES
 
   
3.1
  In consideration for the payment of the fees referred to in Clause 7.1, the
Company hereby with effect from the date of this Agreement grants to the
Distributor an exclusive licence:-
 
   
3.1.1
  for the duration of this Agreement, to use the Software Materials in
accordance with the provisions of this Agreement;
 
   
3.1.2
  for the duration of this Agreement, to use the Source Materials and the
Software for the purposes of developing Distributor Software (and for the
avoidance of doubt the licence granted by this Clause 3.1.2 shall allow the
Distributor read-only access to the source code of the Software);
 
   
3.1.3
  for the duration of this Agreement, to grant to any End-User within the
Territory a sub-licence to use the UK Core Software in object code only and to
distribute copies of the Software Documentation to End-Users for use pursuant to
such sub-licences; and
 
   
3.1.4
  for the duration of this Agreement to modify any Software Documentation solely
to the extent reasonably necessary to tailor the Software Documentation to the
Distributor’s market in the Territory, provided that Company gives its prior
written

7

--------------------------------------------------------------------------------

 

     
 
  approval (which shall not be unreasonably withheld, conditioned or delayed) of
any and all such modifications before Distributor provides them to any third
party.
 
   
3.2
  For the purposes of Clause 3.1 above “use” shall include any act which is
reasonably incidental to such use, including (without limitation) the
maintenance of a reasonable number of back-up or test copies of the UK Core
Software and the copying of any manuals or documents relating to the use of the
Software, provided that any and all copyright notices and other proprietary
rights notices are reproduced on each copy.
 
   
3.3
  The Distributor agrees that it shall not, and shall not permit any other party
to, reverse engineer, decompile, disassemble, adapt, or modify any of the
Software Materials, except as specifically permitted by this Agreement or by
applicable law but then only if and to the extent that the Distributor first
(i) notifies the Company of Distributor’s requirements regarding
interoperability or functional compatibility before engaging in any of the
enumerated actions, and (ii) gives the Company the opportunity to provide the
Distributor with the information necessary to achieve such interoperability or
compatibility.
 
   
3.4
  In consideration for the payment of the fees referred to in Clause 7.1, the
Company hereby grants the Distributor an exclusive licence to use the Mark in
the Territory in the promotion, distribution, and sub-licensing of the UK Core
Software, whether alone or in conjunction with the Distributor’s own trademarks
or logos.
 
   
3.5
  The Distributor acknowledges and agrees that any and all uses of the Mark
pursuant to this Agreement and all goodwill and benefit arising from such use
shall inure to the Company’s sole and exclusive benefit, and the Distributor
hereby assigns all such goodwill to the Company to hold absolutely. Whenever it
uses the Mark, the Distributor shall comply in all material respects with the
Mark Usage Requirements.
 
   
3.6
  The Parties agree to operate with regard to the Escrow Agreement as follows:
 
   
3.6.1
  the Company and the Distributor mutually undertake to execute the Escrow
Agreement promptly following execution of this Agreement. The Company undertakes
to procure that the Escrow Agent executes the Escrow Agreement within three
weeks of the date of this Agreement (as to which time shall be of the essence),
and the Company will procure that a certified copy of the Escrow Agreement as
executed by the Company, Distributor and the Escrow Agent will be provided to
the Distributor as soon as reasonably practicable after the execution by the
Escrow Agent of the Escrow Agreement;
 
   
3.6.2
  the Company and the Distributor mutually undertake to abide by the terms of
the Escrow Agreement; and
 
   
3.6.3
  upon the release by the Escrow Agent of the source code of the Software to the
Distributor in accordance with the Escrow Agreement:

8

--------------------------------------------------------------------------------

 

         
 
  (i)   the Distributor shall cease paying any Revenue Share Fees to the
Company; and
 
       
 
  (ii)   the Distributor will pay the Company quarterly from the date of such
release for the duration of this Agreement (each such quarter an “Escrow
Quarter”) a sum (the “Escrow Royalty”). The Escrow Royalty shall be the US$
Equivalent of [***]% of the total Licence Fees Revenue received by the
Distributor in the Escrow Quarter to which the Escrow Royalty relates provided
that where over four consecutive Escrow Quarters (such four Escrow Quarters, an
“Escrow Year”) the total Escrow Royalties payable for such Escrow Year exceed
£[***], the Escrow Royalties payable for that Escrow Year shall be the US$
Equivalent of £[***].
 
        4.   ENHANCEMENTS
 
        4.1   For the duration of this Agreement the Company shall:-
 
        4.1.1   keep the Distributor informed as soon as reasonably practicable
of any planned or actual technical or business developments, whether of the
Company or of any relevant third party, that may in the reasonable opinion of
the Company be likely to affect the UK Core Software;
 
        4.1.2   inform the Distributor as soon as reasonably practicable of any
planned or completed Releases;
 
        4.1.3   make available to the Distributor, subject to the terms,
conditions, and limitations of this Agreement, any Releases, by not later than
2 months following the date that the Company makes such Releases available to
any of its US distributors or licensees of the Software;
 
        4.1.4   offer to the Distributor the opportunity to examine:-
 
       
 
  (i)   any Releases; and
 
       
 
  (ii)   any tests or results of tests of such Releases that the Company may
carry out, or may have carried out, which tests and test results shall be
considered Confidential Information of the Company;

     
4.1.5
  at the Distributor’s request supply to Distributor any Releases made available
to Distributor pursuant to Clause 4.1.2, together with the Source Materials for
such Releases and updated Software Documentation for the UK Core Software as
upgraded or altered by such Release. For the avoidance of doubt, in the event
that the Distributor decides to acquire and install any Release supplied in
accordance with this Clause 4.1.5, the Distributor shall have read-only access
to the source code of that Release for the purpose of developing or further
developing any Distributor Software).
 
   
4.2
  If the Company makes a Release available to the Distributor, and the
Distributor decides not to acquire and install such Release, then such decision
shall not give rise to

9

--------------------------------------------------------------------------------

 

     
 
  any right to terminate this Agreement, nor shall it result in any adverse
effect on the performance of the Company’s obligations under this Agreement,
unless Company demonstrates that the failure to install the Release materially
adversely affects the performance of, or the Company’s ability to support, the
Software Materials.
 
   
4.3
  All Releases shall, at the option of the Distributor, be subject to the
Acceptance Tests detailed at Clause 9. Upon Formal Acceptance, such Releases
shall be subject to the provisions of this Agreement and (together with any
Releases supplied and installed by the Distributor but not subjected to the
Acceptance Tests detailed at Clause 9) shall benefit from the Maintenance
Services.
 
   
4.4
  The Company shall supply all Releases to the Distributor without additional
charge and the consideration for the supply of such Releases shall form part of
the fees payable by the Distributor to the Company pursuant to the terms of
Clause 7.2.
 
   
5.
  MAINTENANCE SERVICES
 
   
5.1
  In consideration of the payments referred to in Clause 7.2, the Company shall
provide the Maintenance Services from the Acceptance Date in accordance with the
provisions set out in Service Level Agreement for the term of this Agreement.
Notwithstanding anything else in this Clause 5 or this Agreement to the
contrary, however, the Company shall only be required to provide Maintenance
Services to the Distributor with respect to the two most recent Releases or
versions of the Software Materials (and for the avoidance of doubt no Release or
version of the Software Materials shall be deemed a recent Release or version of
the Software Materials unless that Release or version has passed the Acceptance
Tests detailed at Clause 9).
 
   
5.2
  In the event of a default, problem or error in the UK Core Software:-
 
   
5.2.1
  all requests from the Distributor for the provision of Maintenance Services
shall be made in accordance with the Service Level Agreement; and
 
   
5.2.2
  the Company shall perform such Maintenance Services in accordance with the
response requirements set out in the Service Level Agreement.
 
   
5.3
  For the purposes of correcting any default, problem or error in the UK Core
Software, the Distributor acknowledges that the Company shall have the right to
access the UK Core Software remotely and will provide such reasonable assistance
as the Company shall from time to time require in connection with such access,
subject to the Company adhering to the security and access arrangements of the
Distributor as notified to the Company in advance and from time to time. Any and
all corrections to the Software Materials will be made in general Maintenance
Releases.
 
   
5.4
  The Company shall not be responsible for correcting problems or errors in the
UK Core Software resulting from any Distributor Software.
 
   
5.5
  Unless otherwise agreed, any documentation, reports, studies, data, diagrams,
materials, software or computer programmes made available to the Distributor as
part

10

--------------------------------------------------------------------------------

 

     
 
  of the Maintenance Services will be provided within the charges detailed at
Clause 7.2, and the Company shall not be entitled to any additional fee, royalty
or other payment for making such materials available to the Distributor.
 
   
5.6
  The Company warrants, represents, and undertakes to the Distributor that, in
performing the Maintenance Services, all adjustments, adaptations,
customisation, provision of Releases, or other such Modifications by the Company
which take place after the initial installation shall become non-separable parts
of the UK Core Software and shall thus entitle the Distributor to the same level
of support and other services as are applicable to the previously installed
parts of the UK Core Software.
 
   
6.
  DURATION
 
   
6.1
  This Agreement shall commence and take effect on the date first stated above
and shall continue thereafter until terminated in accordance with the provisions
of this Agreement.
 
   
6.2
  This Agreement may be terminated:-
 
   
6.2.1
  by the Company by the giving of not less than 12 months notice in writing to
the Distributor provided that such notice may only be given on or after the
fourth anniversary of the Acceptance Date;
 
   
6.2.2
  by the Distributor by the giving of not less than 12 months notice in writing
to the Company provided that such notice may only be given on or after the
second anniversary of the Acceptance Date;
 
   
6.2.3
  by either Party in accordance with the provisions of Clause 20.
 
   
6.3
  Save as expressly provided in this Clause 6, neither Party shall have the
right to terminate this Agreement at anytime.
 
   
6.4
  The Parties shall meet to review the operation of the Agreement, such meetings
to occur at least twice in each Year (or as the Parties may otherwise agree).
The designation of the locations of the meetings shall alternate between the
Parties (acting reasonably), the location of the first meeting to be determined
by the Distributor. Each Party shall be responsible for all travel and
accommodation costs of its own staff or representatives attending such meetings.
 
   
6.5
  For the term of this Agreement and for a period of one (1) year thereafter,
Distributor shall not either directly or indirectly, including without
limitation through any Affiliates, agents, distributors, partners or any third
parties, license, sub-license, market, distribute, sale or contract to support
any software products competitive with the Software PROVIDED THAT the
restriction in this Clause 6.5 shall not apply to any holding company of the
Distributor or any subsidiary of such holding company (excepting the Distributor
itself) and shall in no way prevent the Distributor acting solely as a licensee
of any such software product. This provision is intended to restrict the
Distributor only to the extent necessary to protect the Company’s legitimate

11

--------------------------------------------------------------------------------

 

     
 
  interests, and the Distributor agrees that its terms are reasonable. If a
court of competent jurisdiction concludes that any provision of this Clause is
too restrictive, such provision will remain valid and enforceable to the fullest
extent determined to be reasonable.
 
   
7.
  PAYMENTS
 
   
7.1
  In consideration of the licence of the Software Materials and the Mark and of
all other rights and interests granted to the Distributor under or pursuant to
the terms of this Agreement, the Distributor will make payment to the Company in
accordance with Appendix C.
 
   
7.2
  The payments referred to in Clause 7.1 shall be paid by bank transfer to such
bank account as the Company may notify in writing to the Distributor, such
notification to be given by the Company to the Distributor at least three days
prior to the due date of payment referred to in Clause 7.1.
 
   
7.3
  The payments referred to in Clause 7.1 shall be the amount payable to the
Company, net of all taxes levied by any United Kingdom taxing authority, of
whatsoever nature, including but not limited to Value Added Tax (VAT).
 
   
7.4
  The Parties agree that the payments referred to in Clause 7.1 (or, if
applicable, any Escrow Royalty payable in accordance with Clause 3.6.3)
constitute all of the payments due to the Company in respect of all of the
rights and licenses granted to the Distributor under this Agreement. Without
prejudice to the foregoing, the Company agrees that no royalties, commissions,
or similar payments shall be due or payable by the Distributor to the Company,
whether by reference to the fees and payments which the Distributor receives
from licensees or otherwise.
 
   
7.5
  The Distributor shall be free to fix its own licence fees and annual support
charges with licensees in respect of each End-User Agreement and any additional
delivery, implementation and training fees.
 
   
7.6
  If the Distributor fails to make any payment to the Company under this
Agreement on the due date then, without prejudice to any other right or remedy
available to the Company, the Company shall be entitled to receive from the
Distributor interest on the amount outstanding on a daily basis at the rate of
[***] per cent ([***]%) per annum above the base rate of Barclays Bank plc from
time to time in force, such interest to be calculated from the date or last date
for payment thereof to the date of actual payment (both dates inclusive). The
provisions of this Clause 7.6 shall not apply to the payment to be made by the
Distributor in accordance with Clause 7.1 to the extent that the Company fails
to notify the Distributor of bank account payment details in accordance with
Clause 7.2.
 
   
7.7
  The Distributor shall furnish to the Company, at the same time the Distributor
makes payment of Revenue Share Fees, a full and complete statement, duly
certified by an officer of the Distributor to be true and accurate, showing the
number of End-User

12

--------------------------------------------------------------------------------

 

     
 
  Agreements entered into during the Quarter Period at issue, the gross license
fees for each End-User Agreement (including details of the number of concurrent
users referred to in each such agreement), any value added tax applicable to
each End User Agreement, the Revenue Share Fee payable to the Company for each
End User Agreement, and the total Revenue Share Fees payable to the Company on
all End User Agreements for that period.
 
   
8.
  CUSTOMISED VERSION
 
   
8.1
  The Company agrees that it shall at its sole cost and expense as soon as
reasonably practicable and at any rate not later than 8 months after the date of
execution of this Agreement:-
 
   
8.1.1
  convert the Software to meet the requirements of the Specification set forth
in Appendix B; and
 
   
8.1.2
  provide Software Documentation in a form reasonably acceptable to the
Distributor (acting in good faith and without delay).
 
   
8.2
  As part of the works referred to in Clause 8.1 the Company shall integrate the
Customer Relationship Management Product into the UK Core Software.

          8.3   The Distributor may at its own cost and expense develop
Distributor Software to interface with the UK Core Software including, but
without limitation, such that the UK Core Software contains the following:-
 
       
 
  (a)   Postal Address Files
 
       
 
  (b)   BACS Files
 
       
 
  (c)   CAP Files
 
       
 
  (d)   Links with vehicle manufacturers marketing in the UK
 
       
 
  (e)   such other files as the Distributor may from time to time reasonably
consider to be necessary.
 
        8.4   All right, title, and interest, including (without limitation)
Intellectual Property Rights, in and to any Distributor Software shall vest in
and be the absolute property of the Distributor. All right, title, and interest,
including (without limitation) Intellectual Property Rights, in and to any
Modifications shall vest in and be the absolute property of the Company.
 
        9.   ACCEPTANCE TESTS

     
9.1
  The Company and the Distributor shall use all reasonable endeavours and act in
good faith to agree to changes to the Specification as soon as reasonably
practicable after the date of this Agreement. As part of this obligation, at the
Distributor’s request and

13

--------------------------------------------------------------------------------

 

     
 
  (in the case of any travel and accommodation costs reasonably and properly
incurred) expense, the Company shall as soon as reasonably practicable after the
date of this Agreement send personnel to the UK to meet and discuss with the
Distributor the modifications required to be made to the Software in order to
create the Test Version of the UK Core Software (any and all such changes, the
“UK Core Software Changes”). Each such modification shall require the
Distributor’s prior consent (such consent not to be unreasonably withheld or
delayed). Any changes made to the Specification (other than any UK Core Software
Change) may result in additional charges to the Distributor. The Distributor
acknowledges that the payment schedule set forth in Appendix C is based on the
current Specification only, as the same shall include the specification for the
UK Core Software created in the development of the UK Core Software Changes in
accordance with this Clause 9.1.
 
   
9.2
  Following the making of any changes to the Specification in accordance with
Clause 9.1, the Company shall proceed to develop the Test Version of, and the
Software Documentation for, the UK Core Software which the Company is to deliver
to the Distributor.
 
   
9.3
  The Distributor shall install the relevant Test Version at the Location in
order for the acceptance testing to be carried out to determine that the Test
Version conforms with the Specification or, in the case of a Release, that the
Release performs the function it is designed to do and that the UK Core Software
as modified or replaced by such Release conforms with the Specification.
 
   
9.4
  The Company will carry out the acceptance of testing upon the Test Version
installed at the Location pursuant to Clause 9.3. When such testing establishes
that the UK Core Software complies with the Specification, the Distributor will
within 5 days confirm this in writing to the Company and the relevant software
will thereupon achieve Formal Acceptance.

          9.5   If the Test Version of the UK Core Software fails to achieve
Formal Acceptance by 31st January 2007 (or such later date as the Parties may
agree) (the “UK Core Software Test Date”), the Distributor shall have the right
to either:
 
       
 
  (a)   require the Company to use reasonable endeavours to carry out (at its
own expense) such remedial work as is necessary for the Test Version of the UK
Core Software to achieve Formal Acceptance and to resubmit the Test Version of
the UK Core Software for testing when it has done so; or
 
       
 
  (b)   terminate this Agreement and recover all sums previously paid to the
Company forthwith on demand.

     
9.6
  If the Distributor chooses to require the Company to carry out further work in
accordance with Clause 9.5(a), it may stipulate a reasonable period (not
exceeding 21 Business Days) after the UK Core Software Test Date within which
the Test Version of the UK Core Software must achieve Formal Acceptance. If the
Test Version of the UK Core Software fails to achieve Formal Acceptance within
such period, the

14

--------------------------------------------------------------------------------

 

     
 
  Distributor shall be entitled to exercise either of its rights in Clauses
9.5(a) or (b) and if the Distributor chooses to require the Company to carry out
further work in accordance with Clause 9.5(a), it may stipulate a further period
(not exceeding 21 Business Days) thereafter within which the Test Version of the
UK Core Software must achieve Formal Acceptance. If the Test Version of the UK
Core Software again fails to achieve Formal Acceptance within such period, the
Distributor shall be entitled to continue exercise either of its rights under
Clauses 9.5(a) or (b) and this Clause 9.6 until the Test Version of the UK Core
Software achieves formal acceptance or this Agreement is terminated.

          9.7   If the Test Version of a Release fails to achieve Formal
Acceptance within 3 months of the date of delivery to the Distributor of such
test version (or such later date as the Parties may agree) (the “Test Date”),
the Distributor shall have the right to either:
 
       
 
  (a)   require the Company to use best endeavours to carry out (at its own
expense) such remedial work as is necessary for relevant Test Version to achieve
Formal Acceptance and to resubmit the relevant Test Version for testing when it
has done so; or
 
       
 
  (b)   terminate this Agreement and to recover all sums previously paid to the
Company forthwith on demand.

          9.8   If the Distributor chooses to require the Company to carry out
further work in accordance with Clause 9.7(a), it may stipulate a reasonable
period (not exceeding 21 Business Days) after the Test Date within which the
relevant Test Version must achieve Formal Acceptance. If the relevant Test
Version fails to achieve Formal Acceptance within such period, the Distributor
shall be entitled to exercise either of its rights in Clauses 9.7(a) or (b) and
if the Distributor chooses to require the Company to carry out further work in
accordance with Clause 9.7(a) it may stipulate a further period (not exceeding
21 Business Days) thereafter within which the relevant Test Version must achieve
Formal Acceptance. If the relevant Test Version again fails to achieve Formal
Acceptance within such period, the Distributor shall be entitled to continue to
exercise either of its rights under Clauses 9.7(a) or (b) and this Clause 9.8
until the relevant Test Version achieves formal acceptance or this Agreement is
terminated.
 
        9.9   Within thirty (30) days after Formal Acceptance of the UK Core
Software and of any subsequent Releases, the Company shall provide the
Distributor with one copy of the Source Materials relating to the software in
respect of which such Formal Acceptance relates which shall be held by the
Distributor at the Location.
 
        9.10   The Distributor shall use the Source Materials relating to the UK
Core Software solely for the purposes of:
 
       
 
  (a)   providing the support services to End-Users;

15

--------------------------------------------------------------------------------

 

         
 
  (b)   analysis to determine the correct interfaces between any other programs
supplied by the Distributor and the UK Core Software; and
 
       
 
  (c)   in accordance with the provisions of Clause 3;
 
            and shall only make such number of copies as is reasonably necessary
for those purposes.

     
10.
  END-USER AGREEMENTS
 
   
10.1
  The Distributor shall make the Software Materials only available to third
parties who have signed an End-User Agreement with the Distributor.
 
   
10.2
  The Distributor shall not solicit End-Users in any territory other than the
Territory.
 
   
10.3
  The Distributor shall ensure that each End-User Agreement contains the
following provisions (each of which may, in respect of any End-User Agreement,
only be varied with the Company’s prior request):-
 
   
10.3.1
  the End-User shall be granted a personal, non exclusive, non transferable,
licence to access and to use the End-User Software solely for the End-User’s
internal use and solely at the End-User’s premises through an application
service provider and not otherwise;
 
   
10.3.2
  the End-User acknowledges that (a) the End-User Software and any Software
Documentation, any copies thereof, and any media on which they are provided are
licensed to the End-User, not sold: (b) it obtains no ownership of the End-User
Software or Software Documentation, any copies thereof, or any media on which
they are provided; (c) it does not have any rights to any Source Materials;
(d) it has no Intellectual Property Rights in the End-User Software or in any
Software Documentation supplied to the End-User and that all such Intellectual
Property Rights shall remain the property of the Distributor or its licensors,
and (e) it has no rights in or to the End-User Software or the Software
Documentation, any copies thereof, or any media on which they are provided,
other than its rights as a licensee to use them in accordance with the terms of
the End-User Agreement;
 
   
10.3.3
  the End-User shall have no right to copy, sell, assign, sub-licence, rent,
loan or otherwise transfer the End-User Software or Software Documentation to
any other person;
 
   
10.3.4
  the End-User acknowledges that, in addition to material and elements that are
protected by copyright law, the End-User Software embodies or contains
confidential and commercially valuable information and trade secrets that are
proprietary to Distributor and its licensors and protected by law (“Proprietary
Information”), which may include (without limitation) computer code, program
architecture, program flow information, design definitions, design
specifications, data structures, data compilations, techniques, interfaces,
calculations, symbologies, formulas, algorithms, and other features of the
End-User Software, and the End-User shall have no right (and

16

--------------------------------------------------------------------------------

 

     
 
  shall not permit any third party) to adapt, reverse engineer, decompile,
disassemble, modify or make error corrections to the End-User Software or make
derivative works based upon the End-User Software;
 
   
10.3.5
  the End-User agrees to use all reasonable endeavours to protect the End-User
Software and the Proprietary Information it contains from unauthorised access,
use, copying, and disclosure;
 
   
10.3.6
  the End-User agrees to provide prompt written notice to the Distributor of any
unauthorised use, copying, or disclosure of the End-User Software;
 
   
10.3.7
  the End-User Software is not designed, manufactured, or intended for use in
environments requiring fail-safe performance;
 
   
10.3.8
  the Distributor makes no warranty in regard of the Software or the UK Core
Software except as expressly set forth in Appendix F to this Agreement. To the
maximum extent permitted by law, and except for the warranties expressly set
forth in Appendix F to this Agreement, the Distributor disclaims in the End-User
Agreement any and all other warranties and conditions relating to the Software
or Core Software, whether express, implied or statutory, including but not
limited to implied warranties (if any) of merchantability, fitness for a
particular purpose and satisfactory quality;
 
   
10.3.9
  the Distributor will limit its liability in accordance with Appendix F to this
Agreement; and
 
   
10.3.10
  the Distributor shall have the right on notice to the End-User to novate,
assign or otherwise transfer any of its rights or obligations under the End-User
Agreement to such third party as it sees fit including, but without limitation,
the Company.
 
   
11.
  TRAINING
 
   
11.1
  Following execution of the Agreement and upon dates to be agreed by the
Parties (using reasonable endeavours and acting in good faith), the Company
recommends and agrees to provide:
 
   
11.1.1
  up to 160 hours of training on the Software for each nominated employee or
agent of the Distributor, up to a maximum group of three (3). Training shall be
at the Company’s location in Utah and shall consist of end user installation and
support training. The training shall be tailored to the reasonable needs of the
Distributor and shall include classroom instruction, taking actual support calls
from end users, and participation in actual installations of the Software at end
user locations; and
 
   
11.1.2
  up to 40 hours of ongoing end user support training for each nominated
employee or agent of the Distributor, up to a maximum group of three (3), at the
Company’s Utah location during each calendar quarter following Formal
Acceptance. Such training shall be tailored to the reasonable needs of the
Distributor and shall include training on enhancements and modifications made to
the Software;

17

--------------------------------------------------------------------------------

 

          11.1.3   further training, upon the Distributor’s reasonable request
and beyond the scope of the training referred to in Clauses 11.1.1 and 11.1.2
above, to allow individual members of the Distributor’s staff to have practical
experience of sales and customer implementations.
 
        11.2   The training covered by Clauses 11.1.1 and 11.1.2 shall be at no
charge to Distributor. However, the Distributor shall be responsible for all
related living and travel expenses for its employees or agents to participate in
the training.
 
        11.3   It is recommended by the Company, but not required, that the
Distributor employ a software engineer to reside at the Company’s location to
facilitate better communication with the Company’s software engineers and the
timely development of enhancements to the UK Core Software. The Company will
make suitable workspace available to such software engineer at no charge. The
Distributor shall be responsible for all other requirements and expenses
associated with any such software engineer, including (without limitation) wages
or salary, benefits, payroll taxes, travel costs, living expenses, and office
furnishings and equipment.
 
        12.   DISTRIBUTOR’S OBLIGATIONS
 
        12.1   The Distributor shall:
 
        12.1.1   not by itself or with others participate in any illegal,
deceptive, misleading or unethical practices including, but not limited to,
disparagement of the Software or the Company or other practices which may be
detrimental to the Software, the Company or the public interest;
 
        12.1.2   except as expressly set forth in Appendix F to this Agreement,
not make any promises or representations or give any warranties, guarantees or
indemnities in respect of the Software Materials on behalf of the Company;
 
        12.1.3   use the Mark only in connection with the UK Core Software and
not use the Mark, or any confusingly similar name or mark, in connection with
any other products or services or as part of the corporate or any trade name of
the Distributor;
 
        12.1.4   follow the Mark Usage Requirements;
 
        12.1.5   use reasonable endeavours to ensure that any Distributor
Software distributed with the UK Core Software is of high quality and properly
performs its intended and stated functions and that the services the Distributor
provides in connection with the UK Core Software are performed in a competent
and professional manner in accordance with software industry standards;
 
        12.1.6   use reasonable endeavours to cooperate with the Company in
facilitating its control and monitoring of the quality of the Software offered
under the Mark;
 
        12.1.7   at the Company’s request, provide all reasonable assistance to
the Company to register the Mark, at the Company’s expense, in the Territory;

18

--------------------------------------------------------------------------------

 

          12.1.8   not alter, obscure, remove, interfere with, or add to any of
the trade marks, trade names, markings, or copyright or other proprietary rights
notices affixed to or contained in the Software Materials delivered to the
Distributor;
 
        12.1.9   permit the Company and its authorised agents upon reasonable
prior written notice to enter any of the Distributor’s premises during the
Distributor’s normal business hours for the purpose of ascertaining that the
Distributor is complying with its obligations under this Agreement (and so that
the Distributor hereby irrevocably licenses the Company, its employees and
agents to enter any such premises for such purpose);
 
        12.1.10   not knowingly take any action or permit any other person to
take any action which infringes any of the Company’s Intellectual Property
Rights in any of the Software Materials or in the Mark;
 
        12.1.11   for the duration of this Agreement and for three (3) years
thereafter but solely for the purpose of allowing the Company to take reasonable
steps to verify the amount of the Revenue Share Fee, (a) keep reasonably
complete and accurate books of account and copies of all documents and other
material relating to this Agreement at its principal office; (b) allow the
Company, by its duly authorised agents and representatives, on reasonable prior
notice, to audit such books, documents, and other material, during the
Distributor’s ordinary business hours, and to make reasonable copies of such
books, documents, and other material; (c) at the Company’s reasonable request,
provide an authorised employee to assist in the examination of Distributor’s
records; and (d) if any audit of the Distributor’s books and records reveals
that the Distributor has failed properly to account for and pay Revenue Share
Fees owing to the Company, and the amount of Revenue Share Fees that the
Distributor has failed properly to account for and pay for any Quarterly Period
exceeds, by five percent (5%) or more, the Revenue Share Fees actually accounted
for and paid to the Company for such period, the Distributor shall, in addition
to paying the Company such past due Revenue Share Fees, with interest as
provided in clause 7.6, reimburse the Company for the reasonable professional
fees and direct out-of-pocket expenses actually and properly incurred in
conducting such audit.
 
        13.   COMPANY’S OBLIGATIONS
 
        13.1   For the duration of this Agreement, the Company shall:-
 
        13.1.1   use reasonable endeavours to provide the Distributor with such
marketing and technical assistance as is reasonably necessary and as mutually
agreed to assist the Distributor with the promotion of the UK Core Software;
 
        13.1.2   endeavour to answer as soon as reasonably possible all
technical queries raised by the Distributor concerning the use or application of
the UK Core Software;
 
        13.1.3   provide the Distributor with an electronic copy of any
promotional literature relating to the Software which the Company may produce
from time to time;

19

--------------------------------------------------------------------------------

 

          13.1.4   promptly maintain and update the Software Documentation to
take into account any modifications made to the Software by Releases and inform
the Distributor of all such changes so that the Distributor can make
corresponding amendments to the Software Documentation in respect of the UK Core
Software;
 
        13.1.5   without prejudice to the provisions of Clause 6.2.1 (whereby
the Company must give not less than 12 months notice in writing, such notice in
any case only to be given on or after the fourth anniversary of the Acceptance
Date), give the Distributor reasonable advance written notice of any material
changes in or modifications of the Software or of the Company’s intention to
discontinue licensing or sub-licensing the Software in the Territory; and
 
        13.1.6   provide the Distributor with all information and assistance
reasonably necessary to enable the Distributor properly to perform its
obligations hereunder in respect of any modified, enhanced or replacement
version of or addition to the Software.
 
        14.   WARRANTIES AND INDEMNITIES
 
        14.1   The Company warrants, represents and undertakes to the
Distributor that:
 
        14.1.1   it has all necessary skill, care and expertise required to
provide the UK Core Software and the Services on the terms set out herein;
 
        14.1.2   the Company will make available suitably qualified staff in the
quantities and of seniority levels reasonably required, to perform the Services
in accordance with the terms of this Agreement;
 
        14.1.3   the Company has obtained and will obtain and maintain in the
future consents from any third parties which are reasonably required for
performance of its obligations under this Agreement;
 
        14.1.4   the Services will be provided in a professional manner in
accordance with software industry standards; and
 
        14.1.5   the Company is a corporation duly organised, validly existing
and in good standing under the laws of Delaware and has full corporate power and
authority to conduct its business as such business is now being conducted and to
enter into this Agreement;
 
        14.1.6   that the Company is the owner of U.S. Registration
No. 2,301,459 for the Mark;
 
        14.2   Further the Company warrants, represents and undertakes to the
Distributor that:
 
        14.2.1   with effect from the Acceptance Date the UK Core Software will
function in accordance with the Specification when installed and used in
accordance with the Software Documentation;

20

--------------------------------------------------------------------------------

 

          14.2.2   any Release will function as it is designed to do and that
the UK Core Software as modified or replaced by such Release will conform with
the Specification when installed and used in accordance with the Software
Documentation;
 
        14.2.3   so far as the Company is aware, having taken all reasonable
precautions, the UK Core Software and any and all Releases and any media on
which such software is delivered are, as delivered to Distributor, free from all
viruses and other malware, including but not limited to any codes or
instructions that may be or will be used to access, modify, delete or damage any
data files or other computer programs used by the Distributor or any End-User;
 
        14.2.4   the Company will, prior to delivery of the UK Core Software and
any Releases, use the most comprehensive and up-to-date virus checker on such
the UK Core Software and/or any Releases;
 
        14.2.5   the UK Core Software and each and every Release shall meet the
requirements of the Specification when installed and used in accordance with the
Software Documentation;
 
        14.2.6   none of the Software Materials or Releases supplied by the
Company to the Distributor under this Agreement will when used by the
Distributor in the Territory in accordance with the terms of this Agreement:
 
       
 
  (a)   place the Company in breach of any contractual obligations to any third
party, or
 
       
 
  (b)   place the Distributor in breach of any proprietary rights or
Intellectual Property Rights of any third party;
 
        14.2.7   in the event that England ceases to use its national unit of
currency and begins to use the Euro as its national unit of currency under
European Monetary Union:
 
       
 
  (i)   the UK Core Software will continue to function effectively and in
conformity with the Specification when installed and used in accordance with the
Software Documentation;
 
       
 
  (ii)   the UK Core Software, as modified by any upgrades, will have the
appropriate Euro symbol built into it and use of such symbol will not
detrimentally affect the functioning of the UK Core Software.
 
        14.3   In the event that the Company receives written notification from
the Distributor of any breach of the warranties set out in Clauses 14.2, the
Company shall as soon as reasonably possible and in any event within 30 days of
the date of such notification and at its own expense use best endeavours to
remedy the same. The Distributor shall reasonably cooperate with the Company, at
no out-of-pocket cost to the Distributor, in remedying the alleged breach,
including but not limited to providing reasonably sufficient information to the
Company to enable it to isolate and correct any claimed non-compliance of the UK
Core Software with the Specification.

21

--------------------------------------------------------------------------------

 

          14.4   The warranties in Clause 14.2 shall equally apply to the UK
Core Software as it may be modified, enhanced or replaced by any Releases and
shall thereafter continue to apply to the UK Core Software following the
implementation of any such Releases.
 
        14.5   The Distributor shall follow good practice and the reasonable
guidance of the Company given from time to time on matters of house-keeping and
shall engage in the regular taking of back-ups so as to minimise the risk of
loss or failure from any fault in or failure of the UK Core Software.
 
        14.6   Subject to the terms, conditions and limitations of this
Agreement, the Company shall indemnify and at all times keep indemnified the
Distributor against any and all claims, liabilities, costs, charges, losses
and/or expenses (including without limitation reasonable legal expenses)
(collectively and individually “Claims”) arising out of any of the warranties
set out in Clauses 14.1 and 14.2 being breached or untrue at any time after the
date of this Agreement and the Company shall further indemnify and at all times
keep indemnified the Distributor against Claims made against the Distributor by
End-Users or other third parties arising from Clause 14.2 (with the exception of
any Claims made against the Distributor by End-Users or other third parties
arising from Clause 14.2.6) being breached or untrue with respect to the UK Core
Software or any Modifications which are supplied by the Distributor to End-Users
in the Territory. Notwithstanding the foregoing, the Company shall not be liable
nor shall it indemnify the Distributor against any Claims arising from the
Distributor Software.
 
        14.7   The Distributor hereby warrants, represents, and undertakes to
the Company that:
 
        14.7.1   the Distributor is a corporation duly organised, validly
existing and in good standing under the laws of England and Wales and has full
corporate power and authority to conduct its business as such business is now
being conducted and to enter into this Agreement;
 
        14.7.2   the Distributor has all necessary skill, care, resources,
personnel, and expertise reasonably required to perform this Agreement;
 
        14.7.3   the Distributor’s performance of this Agreement will not
conflict with or violate any (a) provision of any law, rule or regulation to
which Distributor is subject, or (b) instrument applicable to Distributor or
binding upon its assets or properties;
 
        14.7.4   any specifications that the Distributor provides to the Company
for the purposes of the creation of the UK Core Software will not cause the
Company to be in breach of any Intellectual Property Rights of any third party.
 
        14.8   Subject to the terms, conditions, and limitations of this
Agreement, the Distributor shall indemnify and hold the Company harmless from
and against any and all Claims (including without limitation reasonable legal
expenses) asserted against or incurred by the Company arising out of any of the
representations and warranties set forth in Clause 14.7 being breached or untrue
at any time this Agreement is in effect.

22

--------------------------------------------------------------------------------

 

          14.9   The Party seeking indemnity under this Agreement shall (a) as
soon as reasonably practicable, notify the indemnifying Party in writing of any
and all Claims as to which the indemnified Party has notice and claims a right
of indemnity under this Agreement: (b) not make any admission as to liability or
compromise or agree to any settlement of any such Claims, without the prior
written consent of the indemnifying Party, which consent shall not be
unreasonably withheld or delayed; (c) (upon the indemnifying Party providing
adequate security to the indemnified Party for the liability being indemnified)
give the indemnifying Party the right to control and defence and settlement of
such Claims, including the right to select counsel to defend against such
Claims; and (d) provide the indemnifying Party, at the indemnifying Party’s
expense, with all reasonable assistance in connection with the defence and
settlement of such Claims.
 
        14.10   The Company makes no warranty or representation not expressly
set forth in this Agreement. To the maximum extent permitted by law, and except
for the warranties expressly set forth herein, the Company disclaims any and all
other warranties and conditions, whether express, implied, or statutory,
including but not limited to implied warranties (if any) of merchantability,
fitness for a particular purpose and satisfactory quality.
 
        14.11   Neither Party shall be liable to the other Party for any
indirect, consequential, punitive, exemplary, or other special damages including
without limitation loss of profits, business data or opportunity, howsoever
caused. Further, the parties’ liability under this Agreement shall be limited to
direct, objectively measured damages. The limitations of liability contained in
this Agreement shall apply (a) whether the liability arises in contract, tort
(including negligence or breach of statutory duty), misrepresentation or
otherwise); (b) notwithstanding any failure of essential purpose of any limited
remedy provided herein; and (c) even if such party knows or has reasons to know
of the possibility of such damages.
 
        14.12   The Company shall not be liable nor shall it indemnify the
Distributor against any Claims arising from: (1) any fault or defect in, or
failure to operate of, any Distributor Software to the extent that the breach or
liability would have been avoided but for such fault, defect or failure to
operate; (2) any modification of the Software Materials or Releases except for
Modifications made by the Company and delivered to the Distributor, to the
extent that the breach or liability would have been avoided but for the
modification(s); or (3) any use or distribution of the Software Materials or
Releases that is not expressly authorised by this Agreement.
 
        14.13   Subject to Clause 14.13, the aggregate liability of the Company
to the Distributor under this Agreement shall not exceed the total of the
amounts actually paid by the Distributor to the Company.
 
        14.14   Save for the provisions of Clauses 14.11 and 14.12, nothing
shall operate to limit in any way the financial liability of the Company to the
Distributor for any claim which the Distributor may have under this Agreement
against the Company as a result of or in connection with any claims by End Users
and/or any Infringement Claim, as that

23

--------------------------------------------------------------------------------

 

              term is defined at Clause 16.5 against the Distributor (any and
each such claim an “End User or IP Claim”) PROVIDED THAT in the event of an End
User or IP Claim the Distributor and the Company will comply with the provisions
of Clause 14.9 as if the End User or IP Claim were a Claim.
 
        14.15   Each of the Distributor and the Company covenants and agrees
that it will not, directly or indirectly, solicit or endeavour to entice away
from each other or hire any of its employees for the duration of this Agreement
and for six (6) months thereafter.
 
        15.   RIGHT OF FIRST REFUSAL
 
        15.1   The Company shall not enter and shall procure that none of its
Affiliates enters into any form of licence or distribution agreement pursuant to
which the Company or such Affiliate shall licence or distribute rights in the
Software to be used in any of the Restricted Territories unless and until the
Company has given the Distributor the right to be the distributor or licensee of
such rights in the relevant Restricted Territory in accordance with the
provisions of this Clause 15.
 
        15.2   In the event that the Company or any of its Affiliates proposes
to enter into any form of licence or distribution agreement identified in Clause
15.1 the Company shall notify the Distributor of the existence of such proposal.
In the event that the Distributor notifies the Company within 30 Business Days
of the Distributor receiving notice from the Company pursuant to this Clause
15.2 that it wishes to be the distributor or licensee of the Software in the
relevant Restricted Territory the Company shall grant the Distributor a period
of not less than 30 days (but not exceeding 90 days from the Company’s original
notification of the proposal to the Distributor) in which the Company and the
Distributor acting in good faith, shall use their respective reasonable
endeavours to negotiate and agree to a distribution agreement or licence for
such Restricted Territory. If the Company and Distributor do not agree to any
such license or distribution agreement within that time period, the Company and
its Affiliates shall be free to enter into proposed licences or distribution
agreements of the type identified in Clause 15.1 in the Restricted Territory,
and the Company shall have no liability whatsoever to the Distributor in respect
of the entry into such licence or distribution agreement.
 
        15.3   The provisions of this Clause shall be binding on the Company and
the Company shall procure that each of it Affiliates shall be bound by the terms
of this Clause save that in respect of a Restricted Territory the provisions of
this Clause shall not bind (a) the Company or any such Affiliate to the extent
that such entity supplies the Software or rights in the Software directly to
end-users in that Restricted Territory or (b) an Affiliate of the Company which
after the date of this Agreement acquires the Company and that Affiliate already
has a distributor for its software products in that Restricted Territory or
supplies software products directly to consumers or end-users in such Relevant
Territory.
 
        16.   INTELLECTUAL PROPERTY RIGHTS

24

--------------------------------------------------------------------------------

 

          16.1   The Software Materials, all Source Materials relating to the
Software, and the Intellectual Property Rights therein or relating thereto are
and shall remain the exclusive property of the Company and all copies thereof in
the Distributor’s possession, custody or control shall (to the extent that they
are not exhausted by proper use) be returned to the Company or otherwise
disposed of by the Distributor as the Company may from time to time direct.
 
        16.2   The Distributor acknowledges that the Company is the owner of the
Mark and the Distributor shall not:-
 
        16.2.1   dispute or challenge, or encourage or assist any other person
to dispute or challenge, the validity of the Mark, or the rights of the Company
to the Mark; or
 
        16.2.2   apply for or obtain registration of the Mark, or any other mark
confusingly similar thereto, for any goods or services in any country.
 
        16.3   The Distributor shall notify the Company as soon as reasonably
practicable if the Distributor becomes aware of any unauthorised use of the Mark
or any unauthorised access to, use, copying, or disclosure of the Software
Materials or the Source Materials relating to the Software or any other breach
of the Company’s Intellectual Property Rights therein or relating thereto and
will assist the Company to defend the Company’s rights therein in accordance
with and subject to Clause 16.8. Upon learning of such infringement, the Company
shall have the right, but not the obligation, at its sole discretion and
expense, to take such action as the Company considers necessary or appropriate
to defend or enforce the Company’s Intellectual Property Rights, including,
without limitation, legal action to suppress or eliminate any infringement or to
settle any such dispute or action.
 
        16.4   The Distributor shall not use, reproduce or deal in the Software
Materials or the Source Materials relating to the Software or any copies thereof
except as expressly permitted by this Agreement.
 
        16.5   The Company undertakes to defend the Distributor from and against
any claim or action that the possession, use, sub-licensing, development,
modification or maintenance of the Software, the UK Core Software or any
Releases (or any part thereof) or the Mark and/or the exercise by the
Distributor in the Territory of any rights granted to it by the Company under
this Agreement infringes the Intellectual Property Rights of a third party
(“Infringement Claim”). The Company hereby undertakes to fully indemnify and
hold harmless the Distributor from and against any losses, liabilities, damages,
costs (including all legal fees) and expenses in any way suffered or incurred by
or awarded against the Distributor as a result of or in connection with any such
Infringement Claim (including without limitation all losses incurred by it or in
connection with End-User Agreements).
 
        16.6   The Distributor agrees that the requirements of Clause 14.10
shall apply to any claim for indemnification with respect to any Infringement
Claim.

25

--------------------------------------------------------------------------------

 

16.7   If any Infringement Claim is made, or in the Company’s reasonable opinion
is likely to be made, against the Distributor, the Company may at its sole
option and expense:   16.7.1   procure for the Distributor the right to continue
using, developing, modifying or maintaining the UK Core Software (or any part
thereof) in accordance with the terms of this Agreement;   16.7.2   modify the
UK Core Software so that it ceases to be infringing; or   16.7.3   replace the
UK Core Software with non-infringing software;       provided that if the
Company modifies or replaces the UK Core Software, the modified or replacement
UK Core Software must comply with the warranties contained in Clause 14.2 and
the Specification and the Distributor shall have the same rights in respect
thereof as it would have had under those clauses had the references to the date
of this licence been references to the date on which such modification or
replacement was made.   17.   CONFIDENTIALITY AND ANNOUNCEMENTS   17.1   The
Distributor shall not use or divulge or communicate to any person (other than as
permitted by this Agreement or with the written authority of the Company):

  (a)   any of the Company’s Confidential Information which may come to the
Distributor’s knowledge during the continuance of this Agreement;     (b)   the
Software Materials or any information concerning the same;     (c)   the Source
Materials relating to the Software; or     (d)   any of the terms of this
Agreement

    and the Distributor shall use all reasonable endeavours to prevent
unauthorised access to and the unauthorised use, copying, publication or
disclosure of any such information, materials or documents.   17.2   The Company
shall not use or divulge or communicate to any person (other than with the
written authority of the Distributor):

  (a)   any of the Distributor’s Confidential Information which may come to the
Company’s knowledge during the continuance of this Agreement; or     (b)   any
of the terms of this Agreement

    and the Company shall use all reasonable endeavours to prevent unauthorised
access to and the unauthorised use, copying, publication or disclosure of any
such information, materials or documents.

26

--------------------------------------------------------------------------------

 

17.3   The Distributor and the Company shall ensure that their respective
employees are made aware of and comply with the confidentiality and
non-disclosure provisions contained in this Clause 17 and each of the
Distributor and the Company shall indemnify the other against any loss or damage
which the other may sustain or incur as a result of any breach of confidence by
any of its employees.   17.4   If the Distributor or the Company becomes aware
of any breach of confidence by any of its respective employees it shall promptly
notify the other and give the other Party all reasonable assistance in
connection with any proceedings which that Party may institute against any such
employees.   17.5   The provisions of this Clause shall survive the termination
of this Agreement, but the restrictions contained in Clauses 17.1 and 17.2 shall
cease to apply to any information that (a) comes into the public domain
otherwise than through unauthorised disclosure, in the case of Clause 17.1, by
the Distributor or its employees or, in the case of Clause 17.2, by the Company
or its employees; (b) is received by the Distributor or the Company (as the case
may be) from a third party who does not breach a duty of confidence in
disclosing it; (c) is developed independently by the receiving Party: or (d) is
required to be disclosed by law, by any court of competent jurisdiction or any
administrative or regulatory authority, provided that, where permitted by law,
the Party required to disclose the information provides the other Party prior to
written notice of the required disclosure.   17.6   The Parties shall issue a
joint press announcement to announce the business relationship established by
this Agreement and shall jointly participate in such press events as they may
agree. Each Party may also issue its own press release subject to the prior
approval of the other Party (such approval not to be unreasonably withheld or
delayed).   18.   CUSTOMER ENQUIRIES   18.1   The Distributor shall promptly
forward to the Company any enquiries it may receive for the Software from
persons situated outside the Territory.   18.2   The Company shall refer to the
Distributor any enquiry for the Software it may receive direct from a potential
licensee situated in the Territory.   19.   LEGAL RELATIONSHIP   19.1   During
the continuance of this Agreement the Distributor shall be entitled to use the
title “SOLE UK DISTRIBUTOR OF THE ARKONA DEALER MANAGEMENT SYSTEM” and the
Distributor shall only use such title (whether on the Distributor’s business
stationery, advertising material, website or elsewhere) in accordance with the
Mark Usage Requirements.   19.2   Nothing in this Agreement shall render either
Party a partner, joint venturer, or agent of the other Party and neither Party
shall (except as expressly permitted or

27

--------------------------------------------------------------------------------

 

    contemplated by this Agreement) purport to undertake any obligation on the
other Party’s behalf nor expose the other Party to any liability (except as
expressly permitted or contemplated by this Agreement), pledge or purport to
pledge the other Party’s credit.   20.   TERMINATION   20.1   Notwithstanding
anything else contained herein, this Agreement may be terminated by either Party
forthwith on giving notice in writing to the other if:

  (i)   the other commits any material breach of any term of this Agreement and
(in the case of a breach capable of being remedied) shall have failed, within 45
days if a software related breach or 30 days for any other breach after the
receipt of a request in writing from the other Party so to do, to remedy the
breach;     (ii)   either:     (a)   an order is made or a resolution is passed
for the winding up of the other Party, or circumstances arise which entitle a
court of competent jurisdiction to make a winding-up order in relation to the
other Party; or     (b)   an order is made for the appointment of an
administrator to manage the affairs, business and property of the other Party,
or documents are filed with a court of competent jurisdiction for the
appointment of an administrator of the other Party, or notice of an intention to
appoint an administrator is given by the other Party or its directors; or    
(c)   a receiver is appointed of any of the other Party’s assets or undertaking,
or if circumstances arise which entitle a court of competent jurisdiction or a
creditor to appoint a receiver or manager of the other Party, or if any other
person takes possession of or sells the whole of, or a substantial part of, the
other Party’s assets; or     (d)   the other Party makes any arrangement or
composition with its creditors, or makes an application to a court of competent
jurisdiction for the protection of its creditors in any way, or becomes
bankrupt; or     (e)   the other Party ceases, or threatens to cease, to trade

    and for the purposes of this Clause 20.1(ii), the Parties agree that any
reference therein to an English legal term for any action, remedy, method of
judicial proceedings, legal document, legal status, court, official or any legal
concept or thing shall, in respect of any jurisdiction other than England, be
deemed to include a reference to what most nearly approximates in that
jurisdiction to the English legal term.

28

--------------------------------------------------------------------------------

 

20.2   The Distributor shall not be entitled to any compensation or indemnity
(whether for loss of distribution rights, goodwill or otherwise) as a result of
the termination of this Agreement in accordance with its terms.   21.   EFFECT
OF TERMINATION       On the termination of this Agreement:   21.1   all rights
and obligations of the Parties under this Agreement shall automatically
terminate except:

  (a)   for such rights of action as shall have accrued prior to such
termination and any obligations which expressly or by implication are intended
to come into or continue in force on or after such termination; and     (b)  
that the terms of this Agreement shall remain in full force and effect to the
extent and for the period necessary to permit the Distributor properly to
perform its continuing obligations under each End-User Agreement subsisting at
the date of termination but for a period not to exceed twelve (12) months (and
the Distributor’s obligations under sub-clauses 21.2, 21.3 and 21.4 below shall
be deferred during such period as those continuing obligations subsist);     (c)
  that the obligations of the Parties contained in the Service Level Agreement
shall continue in respect of each End-User Agreement subsisting at the date of
termination, but only a period not to exceed twelve (12) months.

21.2   the Distributor shall immediately eliminate from all its literature,
business stationery, publications, websites, notices and advertisements all
references to the title “SOLE UK DISTRIBUTOR OF THE ARKONA DEALER MANAGEMENT
SYSTEM” and all other representations of the Distributor’s appointment hereunder
and all references to the Mark.   21.3   the Distributor shall at its own
expense forthwith return to the Company or otherwise dispose of as the Company
may instruct all promotional materials and other documents and papers whatsoever
sent to the Distributor and relating to the business of the Company (other than
correspondence between the Parties), all property of the Company, and all copies
of the Software Materials and the Source Materials relating to the Software,
being in each case in the Distributor’s possession or under its control.   21.4
  subject to the continued operation of Clause 21.1, the Distributor shall cause
the UK Core Software to be erased from all computers of or under the control of
the Distributor and shall certify to the Company that the same has been done.  
21.5   each End-User Agreement then subsisting shall continue in effect and
shall survive the termination of this Agreement.

29

--------------------------------------------------------------------------------

 

22.   ASSIGNMENT       Neither the Company nor the Distributor may assign or
transfer all or any part of its respective rights or obligations under this
Agreement, save that either Party may assign the benefits of this Agreement to
(i) an Affiliate whose financial condition is no less favourable than that of
the assigning Party or (ii) any other entity with the prior written consent of
the other Party (such consent not to be unreasonably withheld or delayed).   23.
  WAIVER       No forbearance or delay by either Party in enforcing its rights
shall prejudice or restrict the rights of that Party, and no waiver of any such
rights or of any breach of any contractual terms shall be deemed to be a waiver
of any other right or of any later breach.   24.   SEVERABILITY       If any
provision of this Agreement is judged to be illegal or unenforceable, the
continuation in full force and effect of the remainder of the provisions shall
not be prejudiced.   25.   AMENDMENTS       Any amendment, waiver or variation
of this Agreement shall not be binding on the Parties unless set out in writing,
expressed to amend this licence and signed by or on behalf of each of the
Parties.   26.   THIRD PARTY RIGHTS       No term of this Agreement is intended
to confer a benefit on, or to be enforceable by, any person who is not a party
to this Agreement save for the successors in title to and the permitted assigns
of the Parties, including without limitation End-Users.   27.   NOTICES   27.1  
Any notice given under this Agreement shall be in writing and signed by or on
behalf of the Party giving it and shall be served by (a) delivering it
personally to an officer of the Party or (b) by e-mail and fax containing a copy
(if by e-mail, in .pdf format) of the document duly signed by the appropriate
representative of the Party (to be confirmed by a signed version of the notice
being sent by the notifying Party by airmail) giving notice to the address and
for the attention of the relevant party set out in Clause 28.2 (or as otherwise
notified by that Party under this Agreement). Any such notice shall be deemed to
have been received (a) if delivered personally, at the time of delivery, and
(b) in the case of air mail, email and fax, at the moment of transmission of fax
or the email, whichever the earlier.   27.2   The addresses and fax numbers of
the Parties for the purposes of Clause 27.1 are:

30

--------------------------------------------------------------------------------

 

    Arkona Inc       Address: As stated above       For the attention of: Alan
Rudd       email: alan.rudd@arkona.com       Fax number: 001 801 501 0701      
MCL Group Limited       Address: As stated above       For the attention of:
Peter Varney       email: pvarney@mclgroup.co.uk       Fax number: 0044 01892
544882       or such other address, email address or fax number as may be
notified in writing from time to time by the relevant Party to the other Parties
for the purposes of this Clause.   27.3   In proving such service it shall be
sufficient to prove that the envelope containing such notice was addressed to
the address of the relevant Party set out in Clause 27.2 (or as otherwise
notified by that Party under this Agreement) and delivered to that address and
that the notice was transmitted by fax to the fax number and transmitted by
email to the email address of the relevant Party set out in Clause 27.2 (or as
otherwise notified by that Party under this Agreement).   28.   ENTIRE AGREEMENT
      This Agreement (together with the specification referred to at Part A of
Appendix B) contains the whole agreement between the Parties relating to the
subject matter hereof and supersede all prior agreements, arrangements and
understandings between the Parties relating to that subject matter.   29.  
GOVERNING LAW AND JURISDICTION   29.1   This Agreement shall be governed by and
construed in accordance with the laws of England.   29.2   The Parties submit to
the exclusive jurisdiction of the courts of England and Wales as regards any
claim, dispute or matter arising out of or relating to this Agreement or any of
the documents to be executed pursuant to this Agreement.   29.3   Each Party
irrevocably consents to any process in any legal action or proceedings arising
out of or in connection with this Agreement being served on it in accordance
with the provisions of this Agreement relating to service of notices. Nothing

31

--------------------------------------------------------------------------------

 

    contained in this Agreement shall affect the right to serve process in any
other manner permitted by law.   29.4   The Company irrevocably appoints Finers
Stephens Innocent LLP of 176 Great Portland Street, London W1W 5LS (fax: +44
(0) 207 560 7069 Att: Robert Lands) as its agent to receive on its behalf in
England service of any proceedings arising out of or in connection with this
Agreement. Such service shall be deemed completed on delivery to such agent
(whether or not it is forwarded to and received by the Company).

32

--------------------------------------------------------------------------------

 

APPENDIX A
Escrow Agreement
SEE ESCROW AGREEMENT AND BENEFICIARY REGISTRATION FORM
ATTACHED AND INCORPORATED HEREIN AS PART OF THIS
APPENDIX A
[REMAINDER OF PAGE INTENTIONALLY BLANK]

33

--------------------------------------------------------------------------------

 

APPENDIX B
Specification
Part A:
The Specification for the Software is the specification for the Aberdeen version
of the Software, as publicly available to the Company’s customers on the Arkona
Application Solution Provider (ASP) server hosted by MCI at its hosting facility
in Salt Lake City Utah USA, as of 15 June 2006.
Part B: List of Arkona changes
1. File Changes

•   Zip Code (from 9 numeric to Alpha/Numeric)

•   Phone Number (from 10 numeric to 12 numeric)

•   National Insurance Number (9 Alpha/Numeric from 9 numeric social security #)

2. File Additions

•   Country Code

•   CO2 Emissions

•   Immobilizer Detail

•   Cherished Number Plate

3. User Interface Issues

•   Country to Print

•   Date Format (mm/dd/yy to dd/mm/yy)

•   Dollars to Pounds

•   Vocabulary

4. Vocabulary

•   First Name — Forename

•   Last Name — Surname

•   Labor — Labour

•   Color — Colour

•   Center — Centre

•   Hood — Bonnet

•   Tires — Tyres

•   Favorite — Favourite

•   Check — Cheque

•   Gas — Petrol

•   VIN — Chasis (if needed)

•   License — Licence

•   Any other specific non-UK vocabulary.

34

--------------------------------------------------------------------------------

 

5. Business Rules Application Changes

•   Sales Tax — VAT

•   VAT Basis

•   Tariff Codes

•   Fees — Road Find License

•   Fees Based Off of CO2 Emissions

6. Sales Type

•   New

•   Hire

•   Lease Purchase

•   Contract Hire

•   Finance Lease

35

--------------------------------------------------------------------------------

 

APPENDIX C
Schedule of Payments

1.   In accordance with Clause 7.1 of the Agreement the Distributor agrees to
pay the Company:-   1.1   the US$ Equivalent of the sum of £[***] on execution
by both Parties of this Agreement;   1.2   the US$ Equivalent of the sum of
£[***] upon the date 5 Business Days following the Acceptance Date;   1.3   the
US$ Equivalent of each of the Revenue Share Fees as determined and paid in
accordance with Paragraphs 2 and 3 below.   2.   The Revenue Share Fee shall be
calculated as follows:   2.1   each Revenue Share Fee shall be the aggregate of
all End User Share Fees paid in the Quarterly Period to which the Revenue Share
Fee relates;   2.2   the End User Share Fees shall, with regard to each End
User, be calculated as follows:

  2.2.1   where the product (the “Product”) of the multiplication of that End
User’s Licence Fees Revenue with the Relevant Percentage is greater than £[***],
the End User Share Fees are a quarter of the Product;     2.2.2   where the
Product is less than £[***], the End User Share Fees is £[***];

2.3   for the purposes of this Paragraph 2, the Relevant Percentage is:

  2.3.1   [***]% in 2006, 2007 and 2008;     2.3.2   [***]% in 2009;     2.3.3  
[***]% in 2010; and     2.3.4   [***]% in 2011 and all subsequent years

      PROVIDED THAT where in any Year prior to 2010 the total Revenue Share Fees
payable for that Year in accordance with this Paragraph exceed the US$
Equivalent of the sum of £[***], the Distributor shall only pay the Company the
US$ Equivalent of the sum of £[***] as the total Revenue Share Fees due for that
Year; and in the Years 2010 and 2011 the said figure of £[***] shall be deemed
to be £[***].

3.   Each Revenue Share Fee shall be paid within 30 days of the end of the
relevant Quarterly Period to which such Revenue Share Fee relates.

36

--------------------------------------------------------------------------------

 

APPENDIX D
Service Level Agreement
1. Distributor Support Obligations. Distributor agrees to be primarily
responsible for providing all initial technical support to its End User
customers pertaining to the UK Core Software. Distributor shall maintain a
standard of expertise that enables Distributor to train End Users and to resolve
End User technical questions and issues pertaining to the UK Core Software,
through its UK-based support center.
2. Company Coverage. Company agrees to provide secondary technical support for
the UK Core Software directly to Distributor at its single Site, in Tunbridge
Wells, Kent, England (“Support Services”). Distributor will escalate technical
issues to the Company only after Distributor has exhausted all reasonable
avenues of solving Errors or End User issues with the UK Core Software. Only
designated Distributor employees may contact Company regarding Support Services.
Company shall respond to all Distributor requests for Support Services within
four (4) Support Hours.
3. Priority Level of Errors. When reporting an Error, Distributor shall provide
Company with Distributor’s categorization of the Priority of the Error. Company
and Distributor shall jointly and reasonably determine the Priority level of the
Error and Company will respond in accordance with the following protocols:
Priority A:
(1) Company shall assign senior specialists to correct the Error; (2) provide
Distributor with a status progress at least every 24 hours; and (3) immediately
commence to provide a Workaround or a Fix that is reasonable according to
industry standards with the goal of having a Fix or Workaround within two
Business Days after receipt of output or other documentation of the Error. If
the Error was generated from Distributor Software, improper End User use, third
party products, or environmental factors, then Company reserves the right to ask
Distributor to pay Company a reasonable fee in connection with identifying
and/or correcting such Error, together with out-of pocket expenses.
Priority B:
(1) Company shall assign a specialist to commence correction of the Error; and
(2) provide escalation procedures as reasonably determined by Company support
staff. It is intended that 60% of Priority B Errors will be fixed within three
(3) Business Days.
Priority C:
Company shall include the Fix for the Error in the next major Software release.
4. Telephone Support. During United States Business Days, Company agrees to
provide staffed telephone Support Services between the hours of 0600 & 1900,
Mountain Time (“Support Hours”). For Priority A Errors that occur outside
Support Hours (except

37

--------------------------------------------------------------------------------

 

Sunday), Company shall have a technician on call to respond to Distributor’s
need for assistance.
5. Definitions. Unless otherwise defined herein or in the UK Distribution
Agreement, capitalized terms used herein shall have the same meaning as set
forth in this Appendix D.
“Error” means a malfunction in the UK Core Software which degrades the use of
the UK Core Software, or a failure of the UK Core Software or an omission,
defect or deficiency in the UK Core Software, causing it not to conform to the
Software Materials.
“Fix” means the repair or replacement of source or object or executable code
versions of the UK Core Software to remedy an Error.
“Priority A” means an Error that: (1) renders the UK Core Software inoperative;
or (2) causes the UK Core Software to fail catastrophically; or (3) causes the
UK Core Software to perform an unpredictable result.
“Priority B” means an Error that affects performance of the UK Core Software,
but does not prohibit use of the UK Core Software.
“Priority C” means an Error that causes only a minor impact of the use of the UK
Core Software.
“Workaround” means a temporary change in the procedures followed or data
supplied to avoid an Error without significantly impairing performance of the UK
Core Software.

38

--------------------------------------------------------------------------------

 

APPENDIX E
MARK USAGE REQUIREMENTS
SEE PAGES 1-11 OF ARKONA LOGO GUIDELINES ATTACHED AND
INCORPOARTED AS PART OF THIS
APPENDIX E
[REMAINDER OF PAGE INTENTIONALLY BLANK]

39

--------------------------------------------------------------------------------

 

APPENDIX F
END USER AGREEMENT PROVISIONS

1.   WARRANTIES       In each End-User Agreement the Distributor will warrant to
the End-User that:   1.1   with effect from the date that the UK Core Software
licensed to the End-User is accepted by the End-User in accordance with the
terms of the End-User Agreement, such UK Core Software will function in
accordance with its specification;   1.2   the UK Core Software is, as delivered
by the Distributor to the End-User, free from all viruses and other malware,
including but not limited to any codes or instructions that may be or will be
used to access, modify, delete or damage any data files or other computer
programs used by the End-User.   2.   LIMITATION OF LIABILITY       In each
End-User Agreement the Distributor will limit its liability to provide that
(with the exception of the Distributor’s liability for death or personal injury
caused by the Distributor’s negligence, or for the Distributor’s fraud or
fraudulent misrepresentation, which liability shall not be excluded or limited
in any way), the Distributor’s liability to the End-User in respect of the
Software and/or the UK Core Software shall be limited as follows:   2.1   the
Distributor shall not be liable for any loss of profits, loss of business, loss
of data, depletion of goodwill and/or similar losses or pure economic loss, or
for any special, indirect, punitive or consequential losses, costs, damages,
charges or expenses howsoever arising; and   2.2   the Distributor’s total
aggregate liability in contract, tort (including negligence or breach of
statutory duty), misrepresentation, restitution or otherwise, arising in
connection with the performance of the End-User Agreement shall not exceed the
total of the amounts actually paid by the End-User to the Distributor.

40

--------------------------------------------------------------------------------

 

THIS UK DISTRIBUTION AGREEMENT IS ENTERED INTO AS OF THE 20TH OF JUNE, 2006.

      EXECUTED for and on behalf of ARKONA INC. by  
 
         
Alan Rudd
   
Chairman & Chief Executive Officer
   
 
    EXECUTED for and on behalf of MCL GROUP LIMITED by
 
         
Ichiro Shibata
   
Chairman & Chief Executive
   

41

--------------------------------------------------------------------------------

 

DATE 20 JUNE 2006
(1) ARKONA INC
(2) MCL GROUP LIMITED
 
UK DISTRIBUTION AGREEMENT
 
TROWERS & HAMLINS
Sceptre Court
40 Tower Hill
London EC3N 4DX

 

--------------------------------------------------------------------------------

 

ARKONA DISTRIBUTION AGREEMENT

             
1.
  DEFINITIONS AND INTERPRETATION     1  
2.
  APPOINTMENT     7  
3.
  LICENCES     7  
4.
  ENHANCEMENTS     9  
5.
  MAINTENANCE SERVICES     10  
6.
  DURATION     11  
7.
  PAYMENTS     12  
8.
  CUSTOMISED VERSION     13  
9.
  ACCEPTANCE TESTS     13  
10.
  END-USER AGREEMENTS     16  
11.
  TRAINING     17  
12.
  DISTRIBUTOR’S OBLIGATIONS     18  
13.
  COMPANY’S OBLIGATIONS     19  
14.
  WARRANTIES AND INDEMNITIES     20  
15.
  RIGHT OF FIRST REFUSAL     24  
16.
  INTELLECTUAL PROPERTY RIGHTS     24  
17.
  CONFIDENTIALITY AND ANNOUNCEMENTS     26  
18.
  CUSTOMER ENQUIRIES     27  
19.
  LEGAL RELATIONSHIP     27  
20.
  TERMINATION     28  
21.
  EFFECT OF TERMINATION     29  
22.
  ASSIGNMENT     30  
23.
  WAIVER     30  
24.
  SEVERABILITY     30  
25.
  AMENDMENTS     30  
26.
  THIRD PARTY RIGHTS     30  
27.
  NOTICES     30  
28.
  ENTIRE AGREEMENT     31  
29.
  GOVERNING LAW AND JURISDICTION     31   APPENDIX A SOFTWARE ESCROW AGREEMENT  
  33   APPENDIX B LIST OF ARKONA CHANGES     34   APPENDIX C SCHEDULE OF
PAYMENTS     36   SCHEDULE OF PAYMENTS     36   APPENDIX D SERVICE LEVEL
AGREEMENT     37  
 
            SIGNATURES     40