instruction:
In this task, you're given a passage that represents a legal contract or clause between multiple parties, followed by a question that needs to be answered. Based on the paragraph, you must write unambiguous answers to the questions and your answer must refer a specific phrase from the paragraph. If multiple answers seem to exist, write the answer that is the most plausible.
question:
1                                                                     EXHIBIT 10.2

Portions of this exhibit have been redacted pursuant to a request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act. Omitted information, marked [***] in this exhibit, has been filed with the Securities and Exchange Commission together with such request for confidential treatment.

                             CO-BRANDING AGREEMENT

                 This CO-BRANDING AGREEMENT (this Agreement) is made as of this November 14, 2000 by and between Dassault Systemes, a societe anonyme organized under the laws of France and the owner of Purchaser (Dassault Systemes) and/or certain affiliates of Dassault Systemes, and PlanetCAD Inc. (formerly known as Spatial Technology Inc.), a corporation organized under the laws of the State of Delaware (PlanetCAD) (each a Party, together, the Parties).

                                  WITNESSETH:

                 WHEREAS, PlanetCAD, SPATIAL COMPONENTS, LLC and DASSAULT SYSTEMS CORP. entered into a certain Purchase Agreement, dated July 4, 2000 (Purchase Agreement), pursuant to which DASSAULT SYSTEMES CORP. acquired the Component Business (as defined in the Purchase Agreement) from PlanetCAD and SPATIAL COMPONENTS, LLC, including certain software; and

                 WHEREAS, PlanetCAD has created, operates and maintains its own Web sites, including, without limitation 3Dshare.com and PlanetCAD.com, through which PlanetCAD provides Internet-based services to its customers, and has competence and expertise in the supply of Internet-based services to customers.

                 WHEREAS, as a condition to closing the transaction contemplated under the Purchase Agreement, the Parties hereto agreed to enter into this Agreement for the co-branding of 3Dshare.com.

                 NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

                                   SECTION 1                                    DEFINITIONS

                 All capitalized terms not otherwise defined herein shall have the same meanings set forth in the Asset Purchase Agreement.

                                      1    2

                 1.1 Affiliate(s) shall mean, with respect to any specified Person, any other Person that, directly or indirectly, Controls, is Controlled by, or is under common Control with such Person.

                 1.2 Billing Party means the party responsible for all billing and collection matters associated with the Co-Branded Service.

                 1.3 CBD Software shall mean the following computer software programs, whichever packaging and naming, in the version and release that is commercially available at the Effective Date, as well as corrections, enhancements and modifications of the CBD Software delivered in the maintenance services provided under the Cross-License Agreement executed contemporaneously by the Parties: ACIS (R) 3D Toolkit, ACIS (R), Advanced Blending Husk, ACIS(R) Advanced Rendering Husk, ACIS(R) Local Operations Husk, ACIS(R) Shelling Husk, ACIS(R) Precise Hidden Line Husk, ACIS(R) Mesh Surface Husk, ACIS(R) Space Warping Husk, ACIS(R) Advanced Surfacing Husk, ACIS(R) Cellular Topology Husk, Spatial Deformable Modeler, ACIS(R) Deformable Modeling Husk, JetScream(TM), ACIS(R) JetScream Husk, ACIS (R) RevEnge Husk (MetroCad), ACIS(R) AEC Husk, IVSDK, ACIS(R) Open Viewer and Plug-ins, Large Model Viewer, 3D Building Blox(TM), SAT(R) (ACIS File Format).

                 1.4 CNDA means the Confidential and Non-Disclosure Agreement among, inter alia, PlanetCAD and Dassault Systemes executed contemporaneously herewith.

                 1.5 Co-Branded Service means the service to be developed under this Agreement, including Enhancements, which will be offered to Dassault Systemes Customers via the Dassault Systemes Web site(s) and will contain translation and healing application services substantially similar to those currently offered and sold on the PlanetCAD Web site(s) as of the Effective Date under the product name 3Dshare.com, and based upon the CBD Software.

                 1.6 Control means, with respect to the relationship between or among two or more Persons, shall mean the possession, directly or indirectly,

Source: RAND WORLDWIDE INC, 8-K/A, 4/2/2001





or as trustee or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise, including, without limitation, the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person; provided that neither PlanetCAD nor shall be deemed to be controlled by any other Person or under common control with any Person that is not one of their respective subsidiaries.

                 1.7 Dassault Systemes shall mean the entity that is a party to this Agreement and each of its Affiliates.

                 1.8 Dassault Systemes Customer(s) means any customer of the Co-Branded Service having accessed such Web service, wherever hosted, by first logging in on any Dassault Systemes Web site.

                 1.9 Dassault Systemes Customer Database(s) shall have the meaning set forth in Section 6.1  [DASSAULT SYSTEMES CUSTOMER DATABASES].

                                      2    3

                 1.10 Dassault Systemes Personnel means employees, officers, agents, independent contractors and subcontractors of Dassault Systemes.

                 1.11 Dassault Systemes Web sites means any Web site created, owned, operated or supported by or for Dassault Systemes.

                 1.12 Effective Date means November 14, 2000.

                 1.13 Enhancements mean without limitation, compilations, modifications, adaptations, improvements, bug fixes, corrections, versions, design changes, revisions, upgrades, updates, and new versions with respect to the Co-Branded Services during the Term of this Agreement.

                 1.14 Hardware Infrastructure means all hardware equipment, materials, products and facilities that may be necessary at any time to operate the Software Infrastructure to the Co-Branded Service.

                 1.15 Infrastructure means the Software Infrastructure and the Hardware Infrastructure.

                 1.16 Initial Term shall have the meaning set forth in Section 10.1  [Term].

                 1.17 Know-How shall mean all residual information of a non-tangible form, which is not protected by the United States or European Union laws of copyright, patent or trade secrets and which may be retained by a party who has had access to confidential and proprietary information of the other party, including ideas, concepts or techniques contained therein.

                 1.18 Launch Date shall mean the date of first log in of a Dassault Systemes Customer for the Co-Branded Service.

                 1.19 Marks shall have the meaning set forth in Section 3.4  [Use of Marks].

                 1.20 Net Revenue shall have the meaning set forth in Section 5.5  [Net Revenue Defined].

                 1.21 Non-Billing Party means the party who is not the Billing Party.

                 1.22 Person means any individual or legal entity, including without limitation, partnership, corporation, association, trust or unincorporated organization.

                 1.23 PlanetCAD Personnel means employees, officers, agents, independent contractors and subcontractors of PlanetCAD.

                 1.24 PlanetCAD Web sites means 3dshare.com, PlanetCAD.com and any other Web site created, owned, operated or supported by or for PlanetCAD.

                 1.25 Revenue Report shall have the meaning set forth in Section 5.6  [Reporting and Payment Obligations].

                                      3    4

                 1.26 Software means any computer software program, including programming-code, on-line documentation, if any, user interface related thereto or associated therewith, to the extent that such user interface does exist, and related user and installation documentation other than on-line documentation associated with this computer software program.

Source: RAND WORLDWIDE INC, 8-K/A, 4/2/2001





                 1.27 Server Software means all software, including without limitation, Web interface, Web middleware, Web dynamic content billing, Web content generation software, and any Derivative Works thereof that is used by PlanetCAD to provide services on the Co-Branded Service. The list of all such Software as of the Effective Date is attached in Schedule A which will be updated by PlanetCAD when reasonably requested by Dassault Systemes and when in PlanetCAD's determination significant changes have been made.

                 1.28 Software Infrastructure means the software configuration and environment necessary to perform, supply and support the Co-Branded Service including any Third Party Software.

                 1.29 Term shall have the meaning set forth in Section 10.1  [Term].

                 1.30 Third Party Software means computer software programs owned by a party other than PlanetCAD or Dassault Systemes and incorporated into, or required for the development, operation and/or support of any Web service governed by this Agreement and the Infrastructure associated therewith.

                                   SECTION 2                                  SUBJECT MATTER

                 2.1 Engagement. Dassault Systemes and PlanetCAD agree to cooperate to develop and bring to their customers the Co-Branded Service under the terms and conditions set forth below.

                                   SECTION 3                          OWNERSHIP AND LICENSING RIGHTS

                 3.1 Ownership by PlanetCAD. All right, title and interest in and to: (i) the Server Software and (ii) the service known as of the Effective Date as 3Dshare.com and its Enhancements shall be owned by PlanetCAD.

                 3.2 Ownership by Dassault Systemes. All right, title and interest in and to the CBD Software and its Enhancements shall be owned by Dassault Systemes.

                 3.3 Limited Hosting License. PlanetCAD hereby grants to Dassault Systemes a fully-paid, non-exclusive, worldwide, revocable limited license to the Server Software and Infrastructure for the sole purpose of (i) hosting the Co-Branded Service and (ii) fulfilling its

                                      4    5 obligations under this Agreement. The license granted pursuant to this Section 3.3  [Limited Hosting License] shall be deemed to be automatically revoked upon termination of this Agreement. Within 2 weeks following execution of this Agreement, PlanetCAD will provide Dassault Systemes with the necessary media and licensing keys or similar authorization system (if any) to use such Server Software and Infrastructure according to the above license.

                 3.4 Use of Marks. Prior to commercialization of the Co-Branded Service the parties shall agree on the use and placement of all Dassault Systemes and PlanetCAD logos, trade names, trademarks, service marks, and similar identifying material (collectively referred to as Marks) on the Co-Branded Service. Any usage of a party's Marks on the Co-Branded Service including without limitation size, placement, font and style of such Marks will be subject to such party's prior written approval. On or before the Launch Date, each party shall grant the other party a non-exclusive, non-transferable, revocable right to use their approved Marks, for the sole purpose of advertising, marketing, promotion and sale of the Co-Branded Service. In connection with such license each party agrees not to use the other party's Marks in any manner that is disparaging or that otherwise portrays such party in a negative light. Each party retains all right, title and interest, in and to its Marks. Upon termination of this Agreement the right in either party to use the other party's Marks shall automatically terminate.

                 3.5 Know-How. The parties hereby acknowledge and agree that any and all rights to Know-How developed or shared under this Agreement by either party shall be jointly owned by the parties and may be used by either party in the operation of their respective businesses during and following termination of this Agreement.

                                   SECTION 4             DEVELOPMENT AND COMMERCIALIZATION OF THE CO-BRANDED SITE

                 4.1 Review of Co-Branded Site. Immediately prior to the Launch Date, each party shall have an opportunity to review the content and presentation of the Web pages relating to the Co-Branded Service and shall have the right to request reasonable changes to any aspect of the Co-Branded Service, including without limitation, the look and feel of the Web pages.

                 4.2 Appointment of Liaison. As soon as practicable after the Effective Date, each party shall appoint a project manager to act as a liaison to oversee and ensure compliance of the respective obligations of the parties hereunder.

Source: RAND WORLDWIDE INC, 8-K/A, 4/2/2001





                 4.3 Access to the Co-Branded Service by Dassault Systemes Customers. During the Term of this Agreement, the Co-Branded Service will be accessible from any Dassault Systemes Web site(s), as determined by Dassault Systemes in its sole discretion, on a fully transparent basis by way of a direct link to the first Web page of the Co-Branded Service. Upon exiting the Co-Branded Service, the Dassault Systemes Customers will be automatically returned to the Dassault Systemes Web site. PlanetCAD shall, with consultation and input from Dassault Systemes, perform all services necessary for the implementation of such link between the Dassault Systemes Web site and the Co-Branded Service.

                 4.4 Co-Branding Designations. The Co-Branded Service will be designated as such by use of both party's Marks on the Co-Branded Service, and inclusion of wording such as

                                      5    6 powered by PlanetCAD on all Web pages, associated with the Co-Branded Service. The placement, text, font and size of the wording shall be mutually agreed upon by the parties.

                 4.5 Hosting and Customer Support Obligations of the Parties. Unless otherwise agreed by the parties: (i) PlanetCAD will host the Co-Branded Service at its facilities and shall be responsible for providing the Infrastructure necessary to operate such service; (ii) the party responsible for hosting the Co-Branded Service shall be responsible for all customer billing as set forth in Section 5.1  [Customer Billing] herein; (iii) Dassault Systemes will provide first level customer support; (iv) PlanetCAD will provide second level customer support, and (v) PlanetCAD shall be responsible for all updates and Enhancements of the Co-Branded Service. PlanetCAD shall not charge Dassault Systemes any hosting fee for the Co-Branded Service.

                 4.6 Software Support and Maintenance Obligations of the Parties. For the Term of this Agreement the parties shall cooperate to perform maintenance and support services on their respective software included on and necessary to the operation of the Co-Branded Service. The description of maintenance and support obligations is set forth in the Maintenance and Support Services Schedule, attached hereto as Schedule B and incorporated herein by reference.

                 4.7 Change of Hosting. At any time during the Term of this Agreement, Dassault Systemes may, at its discretion, decide to host the Co-Branded Service, or have it hosted by any third party of its choice, by sending ninety days written notice to that effect to PlanetCAD. In such event, PlanetCAD agrees to: (i) provide to Dassault Systemes a current and updated list of equipment, materials, products and facilities composing the Hardware Infrastructure, and (ii) provide reasonable cooperation with Dassault Systemes in seamlessly transitioning the Co-Branded Service to Dassault Systemes equipment or to the equipment of its subcontractors or Affiliates.

                                   SECTION 5                 CUSTOMER BILLING, PAYMENT TERMS AND AUDIT RIGHTS

                 5.1 Customer Billing. Unless otherwise agreed by the parties and subject to the reporting and revenue sharing obligations set forth in this Section 5, the party responsible for hosting shall be the Billing Party.

                 5.2 Pricing of the Co-Branded Service. Prior to the Launch Date, the parties shall agree on which currencies and list prices shall apply to the Co-Branded Service. If, for whatever reason, the parties fail to agree on a price to be applied, the price applied to the Co-Branded Service shall be equal to the then current list price for such services as offered on the PlanetCAD Web site(s). If, for whatever reason, the parties fail to agree on a currency to be applied, the Billing Party will be entitled to choose a currency, as long as such currency easily converts into US dollars and the Billing Party shall pay to the other party its share of revenue in US dollars, based on the average exchange rate of that currency against US dollars during the last 3 months preceding the date of payment to the other party.

                 5.3 Taxes. The Billing Party may deduct and withhold from any payments due to the other party under this Agreement any and all taxes and other amounts as required

                                      6    7 under the laws of any jurisdiction that has the authority to tax the Billing Party, the other party or the transactions contemplated by this Agreement. However, should the Billing Party consider withholding payment or paying any such amount from payments due under this Agreement, the Billing Party shall send in advance to the other party a certificate setting forth the regulatory and/or legal framework for such a payment, including the provisions of the international tax treaty allowing such payment. The other party will have 30 days from the reception of such information to accept or refuse such payment/withholding:

Source: RAND WORLDWIDE INC, 8-K/A, 4/2/2001





    (i)  If the other party accepts or does not answer within this time frame,           the Billing Party will be entitled to make such payment/withholding           and shall provide the other party with a certificate stating the           amounts withheld and the jurisdictions to which such amounts were           remitted.

    (ii) If the other party provides to the Billing Party a certificate stating           that (a) the Billing Party has no withholding/payment obligations with           respect to the laws of such particular jurisdiction and setting forth           the relevant authority for such statement and/or (b) that such a           payment may be avoided under any applicable law or treaty and provide           with the necessary documentation for that purpose, and if the Billing           Party then determines that it has no such withholding obligation under           the laws of such jurisdiction, the Billing Party shall make any future           payments to the other party without deduction for the items set forth           in the certificate, until such time as the Billing Party reasonably           believes that it has a withholding obligation.

Either Party shall pay any applicable sales or value added tax on the payments due.

                 5.4 Share of Net Revenue. As financial consideration under this Agreement, Net Revenue will be shared by the parties as follows:

                 (a)   For so long as PlanetCAD hosts the Co-Branded Service,                         during which time PlanetCAD shall be the Billing Party,                         all Net Revenue derived from sales of the Co-Branded                         Service to Dassault Systemes Customers shall be                         apportioned [***] percent ([***]%) to Dassault Systems                         and [***] percent ([***]%) to PlanetCAD.

                 (b)   In the event that Dassault Systemes opts to host the                         Co-Branded Service pursuant to Section 4.7  [Change of Hosting] herein they                         shall become the Billing Party and all Net Revenue                         derived from sales of the Co-Branded Service shall be                         apportioned [***] percent ([***]%) to Dassault Systems                         and [***] percent ([***]%) to PlanetCAD.

                 5.5 Net Revenue Defined. Net Revenue shall consist of all revenues recognized by the Billing Party derived from supply of the Co-Branded Service, including the price paid by the customers, less any applicable discounts and net of any commissions or fees paid to third party resellers, to obtain access to the Co-Branded Service and any other fees and charges invoiced by the Billing Party to the customers, without deduction by such party of any other costs or expenses related to achievement of the revenue, provided, however, that Net

                                      7    8 Revenue shall be reduced by the amount, if any, of (i) value-added taxes, (ii) sales taxes or (iii) withholding taxes imposed by any jurisdiction on payments made by a payor in such jurisdiction to a payee outside of such jurisdiction.

                 5.6 Reporting and Payment Obligations. Within 7 Business Days after the end of each calendar quarter, the Billing Party shall provide the other party with an itemized statement, subject to adjustment within 30 days of receipt of such statement, setting forth the Net Revenue achieved over the preceding calendar quarter, and shall include such other information as may be mutually agreed upon by the parties (the Revenue Report). The Revenue Report shall be accompanied by payment to the Non-Billing Party of all amounts owed as set forth on such Revenue Report, as well as - when applicable - the exchange currency rate. When agreed between the parties as provided for in Section 5.2  [Pricing of the Co-Branded Service], payment will be made to the Non-Billing Party in the currency received by the Billing Party for the provision of the Co-Branded Service. Otherwise, payment shall be made in US dollars as provided for in Section 5.2  [Pricing of the Co-Branded Service]. In the event that the Billing Party is unable under foreign currency export controls or similar applicable laws, unknown to the parties at the time where they agree on payments in that currency, to provide payment to the Non-Billing Party in the currency received by the Billing Party the parties agree to negotiate a mutually agreeable solution. A party's right to payment shall accrue upon the date the corresponding revenues accrue to the Billing Party. The parties shall pay interest for late payment of any sum due at the LIBOR rate plus four points (not to exceed the maximum rate authorized, or be inferior to the minimum rate allowed, by applicable law, as the case may be).

                 5.7 Records - Audit. The Billing Party shall, for two years following each transaction relating to the Co-Branded Service, keep true and accurate records and books of account of such transaction containing all particulars which may be necessary for the purpose of auditing payments to the Non-Billing Party under this Agreement. During such two-year period, and upon reasonable notice to the Billing Party, the Non-Billing Party shall have the right to have an audit conducted through a licensed independent accounting firm, of any billings, collections, and taxes on such itemized statement, and to examine the records and books of account of the Billing Party in connection therewith. The Billing Party will bear the costs of such audit if a discrepancy

Source: RAND WORLDWIDE INC, 8-K/A, 4/2/2001





or error of computation in an amount greater than $10,000 in favor of the Non-Billing Party is identified. Any audit conducted pursuant to this Section 5.7  [Records -] shall not be conducted in such a manner as to unreasonably interfere with the Non-Billing Party's operations and in no event shall an audit be conducted more frequently than once each year.

                                      8    9

                                  SECTION 6                       DASSAULT SYSTEMES CUSTOMER DATABASES

                 6.1 PlanetCAD's obligation to maintain and update Dassault Systemes Customer Databases. For as long as PlanetCAD hosts the Co-Branded Service, PlanetCAD will maintain and continuously update Dassault Systemes' Customer Database(s), which shall include without limitation, databases of Dassault Systemes Customers, of demands from and results of Web services supplied to Dassault Systemes Customers and associated Net Revenue and of data collected via the Customer Relations Management (CRM) environment. The Dassault Systemes Customer Databases must be held separately from any other databases held or maintained by PlanetCAD. If not held separately, the Dassault Systemes Customer Databases must be clearly identified and sorted out as the property of Dassault Systemes and the provisions regarding PlanetCAD's limited right of use and its obligation of confidentiality as set forth below apply without change.

                 6.2 Ownership of Dassault Systemes Customer Databases. Dassault Systemes will be deemed the maker of the Dassault Systemes Customer Databases and the owner of any and all right, title and interest in and to the Dassault Systemes Customer Databases and their content, wherever hosted.

                 At all times during the Term of this Agreement, Dassault Systemes will have unrestricted access to and use of the Dassault Systemes Customer Databases, and the content therein.

                 At all times during the Term of this Agreement, and as long as the Dassault Systemes Customer Databases are hosted by PlanetCAD, PlanetCAD benefits from a limited right to use the assault Systemes Customer Databases for the exclusive purpose of performing its obligations under this Agreement.

                 6.3 Transfer of Dassault Systemes Customer Databases. Upon discontinuation of hosting of the Co-Branded Service, PlanetCAD will transfer to Dassault Systemes the Dassault Systemes Customer Databases upon Dassault Systemes' request. PlanetCAD will have no right, license or interest whatsoever in the Dassault Systemes Customer Databases or content therein, except to the extent necessary for performance of its obligations under this Agreement.

                 6.4 Warranty of Confidentiality of Dassault Systemes Customer Databases and Input and Output Data of Dassault Systemes Customers. The parties expressly agree that the Dassault Systemes Customer Databases and their content as well as Dassault Systemes Customers input data to be processed and output data supplied, are confidential information of Dassault Systemes, and will be treated as such, in accordance with the terms and conditions of the CNDA.

                                      9    10

                                   SECTION 7                             COMPETITIVE RESTRICTIONS

                 7.1 Restrictions on PlanetCAD.

                 (a) During the Term of this Agreement, and for a period of one year thereafter, except as expressly provided in this Agreement, PlanetCAD shall not market any services to Customers without the prior written approval of Dassault Systemes.

                 (b) During the Term of this Agreement, PlanetCAD shall be permitted to market new functions and services relating to the Co-Branded Service directly to Dassault Systemes Customers with Dassault Systemes prior written approval, but only to the extent such functions and services are offered by PlanetCAD on the PlanetCAD Web site(s).

                 (c) Notwithstanding the foregoing, PlanetCAD may market new functions and services on the PlanetCAD Web sites to customers that are Dassault Systemes Customers, without the consent of Dassault Systemes, provided PlanetCAD (i) obtained the contact information of such customer from an independent source unrelated to the parties to this Agreement and can provide evidence as to the independent source of the name and e-mail address of such customer, and (ii) did not use the data contained in the Dassault Systemes Customer Database(s).

                 7.2 Restrictions on Dassault Systemes. Except as contemplated under this Agreement, during the two year period following the Effective Date, Dassault Systemes shall not commercially offer any web service, which is (i) based upon the ACIS-based software transferred to Dassault Systemes in

Source: RAND WORLDWIDE INC, 8-K/A, 4/2/2001





connection with the Purchase Agreement and (ii) similar to the Co-Branded Service.

                 7.3 Non-Exclusive Services Agreement. It is agreed and acknowledged by the parties that this Agreement is not an exclusive services agreement and except for the restrictions set forth in this Section nothing herein shall prohibit Dassault Systemes, PlanetCAD or any of their affiliates from developing or supplying, whether directly or indirectly, web services substantially identical to those described herein.

                                   SECTION 8                          REPRESENTATIONS AND WARRANTIES

                 8.1 Mutual Representations. Each party represents and warrants to the other party as follows:

                 (a) The performance of this Agreement does not infringe or conflict with any Intellectual Property right of any third party, and (ii) no confidential, proprietary or trade secret information of either party or their personnel that will be used in performing this Agreement has been misappropriated from any third party; and

                                      10    11

                 (b) All services, work, obligations or assignments performed by either party under this Agreement will be of professional quality, conforming to generally accepted practices within the industry, and the Infrastructure including Third Party Software shall function and perform to the specifications and requirements thereof.

                 8.2 Hosting Representations and Warranties of PlanetCAD. For so long as PlanetCAD is hosting the Co-Branded Service, PlanetCAD shall use commercially reasonable efforts to ensure that the services provided on the site are equivalent in functionality and performance to the applications run on the PlanetCAD Web sites and of good quality according to generally accepted practices within the industry.

                 8.3 Disclaimer. THIS IS AN AGREEMENT SOLELY FOR SERVICES, AND THERE SHALL BE NO WARRANTIES, EXPRESS OR IMPLIED, EXCEPT AS STATED HEREIN.

                                   SECTION 9                     INDEMNITIES AND LIMITATIONS ON LIABILITY

                 9.1 Dassault Systemes Indemnification. Dassault Systemes shall indemnify and hold harmless PlanetCAD, and its officers, directors, employees, and shareholders from and against any claims, demands, suits, causes of action, losses, damages, judgments, costs and expenses (including reasonable attorneys' fees) arising out of or related to any breach of Dassault Systemes' representations, warranties and covenants set forth in this Agreement.

                 9.2 PlanetCAD Indemnification. PlanetCAD shall indemnify and hold harmless Dassault Systemes, its affiliates, and their respective officers, directors, employees, and shareholders from and against any claims, demands, suits, causes of action, losses, damages, judgments, costs and expenses (including reasonable attorneys' fees) arising out of or related to any breach of PlanetCAD's representations, warranties and covenants set forth in this Agreement.

                 9.3 Intellectual Property Infringement.Each Party agrees to hold the other Party, its subsidiaries and distributors and assignees harmless from and against any claim of any nature, including, but not limited to, administrative, civil or criminal procedures, which is or may be made or raised against this Party, its subsidiaries and distributors and assignees by any third party that the use or distribution of the Software or any other intellectual property that is the subject of this Agreement and owned or licensed by this Party, infringes or violates any third party's patent, copyright, trade secret or other intellectual property right in any country. Indemnification hereunder shall cover all damages, regardless of their nature, settlements, expenses and costs, including costs of investigation, court costs and attorneys' fees. The payment of any indemnification shall be contingent on:

    (a)  This Party giving prompt written notice to the other of any such claim           or allegation;

    (b)  Cooperation by this Party with the other Party in its defense against           the claim; and

                                      11    12

    (c)  This Party obtaining the other's prior written approval of any           settlement, if any, by this Party of such matters, such approval not           to be unreasonably withheld.

Source: RAND WORLDWIDE INC, 8-K/A, 4/2/2001





                 Neither Party shall have the obligation to indemnify the other for any claims of infringement based on any modification by the latest version of its Software, or from the combination of its Software with any other program to the extent such claim would not have arisen without such combination or from use of the unmodified Software or intellectual property.

                 If the operation of any Software that is the subject of this Agreement becomes, or is likely to become, the subject of a claim involving the infringement or other violation of any patent, copyright, trade secret, or other intellectual property rights of any third party, the Parties will jointly determine in good faith what appropriate steps are to be taken by them, with a view towards curing such infringement or other violation, at the Software owner's sole charge. Such steps may include, but are not limited to:

    (i)  The owner securing the right to continue using its Software, or

    (ii) The owner replacing or modifying its Software so that it becomes           non-infringing.

                 If no other option is reasonably available, the owner of the Software agrees to use its best efforts to withdraw, at its sole expense, the infringing Software from the market.

                 In the event a Derivative Work, created under this Agreement, becomes the subject of a claim of infringement, the owner of said Derivative Work shall indemnify the other Party pursuant to this Section 9.

                 9.4 LIMITATIONS ON LIABILITY. EXCEPT FOR LIABILITY ARISING FROM SECTION 9.3  [Intellectual Property Infringement], IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, LOSSES, OR EXPENSES INCLUDING, BUT NOT LIMITED TO, LOSS OF USE, LOSS OF PROFITS, OR LOSS OF GOODWILL, EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGE.

                 EXCEPT FOR LIABILITY ARISING FROM SECTION 9.3  [Intellectual Property Infringement], IN NO EVENT SHALL EITHER PARTY BE LIABLE UNDER THIS AGREEMENT FOR AN AMOUNT GREATER THAN THE AMOUNT THAT SUCH PARTY HAS EARNED PURSUANT TO THE REVENUE SHARING PROVISIONS OF SECTION 5.4  [Share of Net Revenue] IN THE TWELVE MONTH PERIOD PRECEDING THE CLAIM.

                                  SECTION 10                               TERM AND TERMINATION

                 10.1 Term. This Agreement shall be effective as of the Effective Date and shall continue in force for three years from the Launch Date (the Initial Term) unless earlier

                                      12    13 terminated in accordance with this Section (the Term). The Agreement shall automatically renew for successive one year additional terms unless terminated by either party at least six months prior to the expiration of the then-current term.

                 10.2 Breach. Either party may terminate this Agreement at any time in the event that the other party is in default or breach of any material provision of this Agreement, and such default or breach continues unremedied for a period of sixty days after written notice thereof. In addition to the right to terminate this Agreement, the non-breaching party, shall have all rights and remedies available at law and in equity.

                 10.3 Failure of Negotiations After Initial Term. The revenue sharing obligations set forth in Section 5.4  [Share of Net Revenue] shall be subject to re-negotiation at the end of the Initial Term. The parties agree to negotiate in good faith, however, in the event they are unable to agree to satisfactory terms, this Agreement shall terminate six months from the date on which the parties make a conclusive determination that satisfactory terms could not be reached.

                                  SECTION 11                                   MISCELLANEOUS

                 11.1 Confidentiality. All communications and information disclosed by one party to the other party under this Agreement shall be subject to the terms and conditions of the CNDA.

                 11.2 Freedom of Action. Except as otherwise provided, nothing contained in this Agreement shall be construed to limit or impair any right of either party to enter into similar agreements with other parties, or to develop, acquire, license or market, directly or indirectly, other products or services, competitive with those offered by the other party.

                 11.3 Additional Instruments. Notwithstanding termination of this Agreement, the parties covenant and agree to execute and deliver any additional instruments or documents necessary to carry out the general intent of this Agreement, including without limitation patent assignments or any other assignments necessary to evidence the ownership of intellectual property contemplated hereby or any such additional instruments or documents, including

Source: RAND WORLDWIDE INC, 8-K/A, 4/2/2001





such instruments as may be required by the laws of any jurisdiction, now or in effect or hereinafter enacted, that may affect a party's rights, title or interest, as applicable, in and to any of the software governed hereby.

                                      13    14

                 11.4 Irreparable Injury. Each party acknowledges and agrees that each covenant in this Agreement pertaining to confidential information and ownership of intellectual property is reasonable and necessary to protect and preserve the rights of the other party in its confidential information and intellectual property, and that any breach by such party of the terms of this Agreement may result in irreparable injury to the other party. Each party, therefore, subject to a claim of laches, estoppel, acquiescence or other delay in seeking relief, consents and agrees that the other party shall be entitled to seek and obtain a temporary restraining order and a permanent injunction to prevent a breach or contemplated breach of this Agreement and waives any requirement that the other party post a bond in connection with seeking such injunctive relief.

                 11.5 Relationship of the Parties. PlanetCAD and Dassault Systemes are independent contractors, and nothing in this Agreement will create any partnership, joint venture, agency, franchise, sales representative, or employment relationship between the parties. Neither party has the authority to act as agent for the other party or to conduct business in the name of such other party or make statements, warranties or representations that exceed or are inconsistent with the warranties provided hereunder.

                 11.6 Notices. All notices required or permitted shall be given in writing, in the English language, and shall be deemed effectively delivered upon personal delivery or three days after deposit with a carrier by registered mail or other equivalent service, postage prepaid, return receipt requested, addressed as follows, or to such other address as either party may designate to the other:

                                      14    15

                          In the case of PlanetCAD :

                                           PlanetCAD Inc.                                             2520 55th Street, Suite 200                                             Boulder, Colorado 80301                                             Attn. Office of the President

                          In the case of Dassault Systemes:

                                           Dassault Systemes                                             9 Quai Marcel Dassault                                             92150 Suresnes                                             Attn. Thibault De Tersant                                             cc: Law Department

                 11.7 Headings. The descriptive headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

                 11.8 Severability. If any term or other provision of this Agreement is deemed invalid, illegal or incapable of being enforced by any law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.

                 11.9 Entire Agreement. This Agreement, together with the Schedules attached hereto, constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, between and PlanetCAD with respect to the subject matter hereof.

                 11.10 Amendment. This Agreement may not be amended or modified except by an instrument in writing signed by, or on behalf of, duly authorized representatives of Dassault Systemes and PlanetCAD.

                                      15    16

                 11.11 Applicable Law, Venue. This Agreement shall be governed by, and construed in accordance with, the Laws of the State of New York, applicable to contracts executed in and to be performed entirely within that

Source: RAND WORLDWIDE INC, 8-K/A, 4/2/2001





state. This Agreement shall not be governed by the U.N. Convention on Contracts for the International Sale of Goods. The parties hereto hereby (a) submit to the exclusive jurisdiction of any court of competent jurisdiction sitting in the State of Delaware, The City of Wilmington for the purpose of any Action arising out of or relating to this Agreement brought by any party hereto, and (b) agree, to the fullest extent permitted by applicable law, to waive, and not to assert by way of motion, defense, or otherwise, in any such Action, any claim that is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement may not be enforced in or by any of the above-named courts.

                 11.12 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTIONS OR PROCEEDINGS DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREUNDER.

                 11.13 Counterparts. This Agreement may be executed in one or more counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

                 11.14 No Waiver. The failure of either party to enforce any provision of this Agreement shall not constitute a waiver of the right to subsequently enforce such provision, or any other provision of this Agreement.

                 11.15 Force Majeure. Neither party shall be held liable for any failure to perform any of its obligations under this Agreement for as long as, and to the extent that such failure is due to an event of force majeure. An event of force majeure shall include general strikes, lockouts, acts of God, acts of war, mobilization of troops, fire, extreme weather, flood, or other natural calamity, embargo, acts of governmental agency, government or any other laws or regulations.

                 11.16 Expenses. Except as expressly provided for in this Agreement, each party shall bear its own expenses incurred in connection with this Agreement, including without limitation travel and living expenses incurred by that party's employees.

                 11.17 Assignment; Subcontracting; Third Party Beneficiaries.

                 (a) This Agreement may be assigned or otherwise transferred, by operation of law or otherwise without the express written consent of PlanetCAD and Dassault Systemes, but in such event the assigning Party shall give notice to the non-assigning Party and the non-assigning Party shall have the right to terminate this Agreement within the 30-day period following receipt of such notice.

                                      16    17

                 (b) Either party may assign or otherwise transfer all or part of this Agreement to any of its Affiliates, and for as long as it remains an Affiliate; provided that no such assignment shall relieve a party of any of its obligations under this Agreement. In the event there is a change of Control of an Affiliate which terminates its status as an Affiliate of the party to this Agreement, and this Agreement has been assigned to such an Affiliate, this Agreement must be assigned back to the party within 6 months of the effective date of the change of Control.

                 (c) Either Party may subcontract services necessary to perform the obligations set forth in this Agreement provided that any and all such subcontractors shall have entered into agreements with the subcontracting Party sufficient to enable that Party to comply with all terms and conditions of this Agreement.

                 (d) This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their permitted assigns, subcontractor or transferee, and nothing herein, express or implied, is intended to or shall confer upon any other person, including, without limitation, any union or any employee or former employee of either party, any legal or equitable right, benefit or remedy of any nature whatsoever, including, without limitation, any rights of employment for any specified period, under or by reason of this Agreement.

                 IN WITNESS WHEREOF, each party has caused its duly authorized representative to execute this Agreement effective the day and year first above written.

                                              PlanetCAD Inc.                                   Dassault Systemes

/s/ R. Bruce Morgan                              /s/ Thibault de Tersant

Source: RAND WORLDWIDE INC, 8-K/A, 4/2/2001





   ---------------                                  ------------------- Its: Chief Executive Officer                     Its: Executive Vice President Name: R. Bruce Morgan                            Name: Thibault de Tersant

                                      17

Source: RAND WORLDWIDE INC, 8-K/A, 4/2/2001 
Question: Highlight the parts (if any) of this contract related to Cap On Liability that should be reviewed by a lawyer. Details: Does the contract include a cap on liability upon the breach of a party’s obligation? This includes time limitation for the counterparty to bring claims or maximum amount for recovery.
answer:
EXCEPT FOR LIABILITY ARISING FROM SECTION 9.3  [Intellectual Property Infringement], IN NO EVENT SHALL EITHER PARTY BE LIABLE UNDER THIS AGREEMENT FOR AN AMOUNT GREATER THAN THE AMOUNT THAT SUCH PARTY HAS EARNED PURSUANT TO THE REVENUE SHARING PROVISIONS OF SECTION 5.4  [Share of Net Revenue] IN THE TWELVE MONTH PERIOD PRECEDING THE CLAIM.


question:
Exhibit 10.1 Certain information identified by bracketed asterisks ([ * * * ]) has been omitted from this exhibit because it is both not material and would be competitively harmful if publicly disclosed. EXCLUSIVE LICENSE AND PRODUCT DEVELOPMENT AGREEMENT THIS EXCLUSIVE LICENSE AND PRODUCT DEVELOPMENT AGREEMENT (this Agreement) is entered into as of June 12, 2019 (the Execution Date) by and between Eton Pharmaceuticals, Inc., a Delaware corporation with offices at 21925 W. Field Pkwy, Suite 235, Deer Park, Illinois, USA (ETON), and Aucta Pharmaceuticals, Inc., a Delaware corporation with offices at 71 Suttons Lane, Piscataway, NJ 08854 (Aucta) . RECITALS WHEREAS, ETON is engaged in the business of licensing, developing, marketing, distributing and selling pharmaceutical drug products; WHEREAS, Aucta is engaged in the business of developing pharmaceutical drug products, including the Products (later defined); WHEREAS, ETON desires to obtain an exclusive license to the Products, the Dossiers (later defined), and Aucta Background Intellectual Property (later defined) for Marketing the Products in the Territory, and Aucta is willing to grant such an exclusive license to ETON under the terms and conditions set forth herein; WHEREAS, ETON will pay Aucta certain milestone, royalty and licensing payments based on the sale of Products in the Territory under the terms and conditions set forth herein; and WHEREAS, the parties hereto agree that, unless otherwise stated, the terms herein shall not be effective unless and until the Effective Date (later defined) occurs. NOW, THEREFORE, in consideration of the foregoing premises and the representations, warranties, covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, ETON and Aucta, intending to be legally bound, hereby agree as follows: 1. DEFINITIONS. For the purposes of this Agreement, the following terms whether used in singular or plural form shall have the meanings as defined below: 1.1 Affiliates means, with respect to a Party or any Third Party, any corporation, firm, partnership or other entity that controls, is controlled by or is under common control with such entity. For the purposes of this definition, control means the ownership of at least 50% of the voting share capital of an entity or any other comparable equity or ownership interest. 1.2 ANDA Litigation shall have the meaning ascribed to the term in Section 7.5.2 of this Agreement.

Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019





CONFIDENTIAL 1.3 Applicable Law means the applicable laws, rules, regulations, guidelines and requirements of any Governmental Entity related to the development, registration, manufacture, importation, commercialization of the Products in the Territory, the manufacture in and export from the Territory of Manufacture, or any obligation under, or related to, this Agreement, including those obligations applicable to the Dossiers. 1.4 Aucta Background Intellectual Property means any and all patents and trademarks, patent and trademark applications or other patent and trademark rights, copyrights, inventions, know-how, trade secrets, proprietary knowledge, data, formulations, product specifications and other information owned, licensed to or controlled by Aucta relating to the Products, including but not limited to use, manufacture, and packaging thereof. 1.5 Aucta Indemnified Parties shall have the meaning ascribed to the term in Section 13.2 of this Agreement. 1.6 Breaching Party shall have the meaning ascribed to the term in Section 11.2 of this Agreement. 1.7 Business Day means any day, other than Saturday, Sunday or other day on which commercial banks are authorized or required to close in New York, New York or Rome, Italy. 1.8 Calendar Quarter means a three (3) consecutive month period ending on March 31, June 30, September 30 or December 31. 1.9 Claim includes a claim, notice, demand, action, proceeding, litigation, prosecution, arbitration, investigation, judgment, award, damage, loss, cost, expense or liability however arising, whether present, unascertained, immediate, future or contingent, whether based in contract, tort or statute and whether involving a Third Party or a Party or otherwise. 1.10 Confidential Information shall have the meaning ascribed to the term in Section 9.2 of this Agreement. 1.11 Dossiers means the New Drug Applications pursuant to 21 U.S.C. §355(b)(1)-(2), and all amendments and supplements thereof, for the Products as set forth in Exhibit A. 1.12 Effective Date shall have the meaning ascribed to the term in Section 11.1 of this Agreement. 1.13 ETON Indemnified Parties shall have the meaning ascribed to the term in Section 13.1 of this Agreement. 1.14 FDA means the United States Food and Drug Administration and all divisions under its direct control or any successor organizations. 1.15 Force Majeure Events shall have the meaning ascribed to such term in Section 15.2 of this Agreement. 2

Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019





CONFIDENTIAL 1.16 GMP means current good manufacturing practices as defined by the FDA. 1.17 Governmental Entity means any arbitrator, court, judicial, legislative, administrative, or regulatory agency, commission, department, board, or bureau or body or other government authority or instrumentality or any Person or entity exercising executive, legislative, judicial, regulatory, or administrative functions of or pertaining to government, whether foreign or domestic, whether federal, state, provincial, municipal, or other. 1.18 Gross Sales shall have the meaning ascribed to the term in Section 1.26. 1.19 Indemnitee shall have the meaning ascribed to the term in Section 13.3.1 of this Agreement. 1.20 Indemnitor shall have the meaning ascribed to the term in Section 13.3.1 of this Agreement. 1.21 Infringement Notification Date shall have the meaning ascribed to the term in Section 7.4 of this Agreement. 1.22 Intellectual Rights Suit shall have the meaning ascribed to the term in Section 7.4 of this Agreement. 1.23 Losses means all losses, costs, damages, judgments, settlements, interest, fees or expenses including, without limitation, all reasonable attorneys' fees, experts' or consultants' fees, expenses and costs. 1.24 Market or Marketing shall have the meaning ascribed to the term in Section 2.1 of this Agreement. 1.25 NDC means a national drug code as issued by the FDA. 1.26 Net Sales means, with respect to each Product sold in the Territory, the aggregate gross sales amount invoiced by ETON or any sublicensee or other party authorized by ETON to wholesale or distribute the Products on an arms-length basis to Third Parties in the Territory (Gross Sales), less (as applicable) the following ETON expenses as accrued and adjusted for amounts actually taken, consistent with ETON'S standard accounting practices in accordance with GAAP: (a) amounts refunded or credited for returned, damaged, outdated, short-dated or defective goods, and bad debts, and (b) all of the following: (i) taxes, duties and other governmental charges related to the production, use or sale of the Products (including, including without limitation the brand manufacturer's tax imposed pursuant to the Patient Protection and Affordable Care Act (Pub. L. No. 111-148) as amended or replaced, but not including taxes assessed against the income derived from such sale); (ii) trade, quantity and cash discounts, allowances, retroactive price adjustments, credit incentive payments, chargebacks, patient support programs, and rebates (including governmental rebates or other price reductions provided, based on sales by ETON to any Governmental Entity or regulatory authority in respect of state or federal Medicare, Medicaid, government pricing or similar programs;); and (iii) any costs incurred in connection with or arising out of compliance with any Risk Evaluation and Mitigation Strategies approved by the FDA and (iv) any expenses associated with serialization of the Products. Distribution of Licensed Products for clinical trials or as samples will not be deemed a Net Sale under this definition. 3

Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019





CONFIDENTIAL 1.27 Party or Parties means ETON or Aucta, as applicable. 1.28 Payment Period shall have the meaning ascribed to the term in Section 6.3.7 of this Agreement. 1.29 Person means any individual, partnership (general or limited), association, corporation, limited liability company, joint venture, trust, estate, limited liability partnership, unincorporated organization, government (or any agency or political subdivision thereof) or other legal person or organization. 1.30 Pharmacovigilance Agreement shall have the meaning ascribed to the term in Section 3.4 of this Agreement. 1.31 Product or Products means a product or products set forth in Exhibit A for Marketing by or for ETON in the Territory (and covered or intended to be covered by a Dossier) and manufactured and supplied by Aucta (or a Third Party as permitted by this Agreement) to ETON in fully packaged and labeled form and ready for commercialization by ETON. 1.32 Recall Event shall have the meaning ascribed to that term in Section 3.4 of this Agreement. 1.33 Sale Representatives FTE shall have the meaning ascribed to the term in Section 5.4 of this Agreement. 1.34 Specification shall mean, for a particular Product, the specifications, methods and processes of the product, as set forth in the applicable Dossier for that Product. 1.35 Taxes means taxes, duties, fees, premiums, assessments, imposts, levies and other charges of any kind whatsoever imposed by any Governmental Entity, including all interest, penalties, fines, additions to tax or other additional amounts imposed by any Governmental Entity in respect thereof, and including those levied on, or measured by, or referred to as, income, gross receipts, profits, capital, transfer, land transfer, sales, goods and services, harmonized sales, use, value-added, excise, stamp, withholding, business, franchising, property, development, occupancy, employer health, payroll, employment, health, social services, education and social security taxes, all surtaxes, all customs duties and import and export taxes, countervail and anti-dumping, all license, franchise and registration fees and all employment insurance, health insurance and government pension plan premiums or contributions. 1.36 Term shall have the meaning ascribed to this term in Section 11.1 of this Agreement. 4

Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019





CONFIDENTIAL 1.37 Territory shall mean the fifty states of the United States of America, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands and all territories and possessions of the United States of America and United States military bases. 1.38 Territory of Manufacture means the country where the Products is made. 1.39 Third Party means any Person other than ETON, Aucta or their respective Affiliates. 1.40 Transfer Taxes shall have the meaning ascribed to this term in Section 10 of this Agreement. 2. GRANT OF RIGHTS 2.1 Aucta, for itself and its Affiliates, hereby grants to ETON in accordance with the terms and conditions of this Agreement, an exclusive (even as to and against Aucta in the Territory) right and license, including the right to sublicense, to the Products (or any components thereof), Dossiers, and all current and future Aucta Background Intellectual Property that is owned or controlled by Aucta or its Affiliates for ETON to develop, manufacture, import, use, promote, distribute, market, advertise, offer for sale or sell (collectively, Market) the Products in and for the Territory. For avoidance of doubt, Aucta and its Affiliates shall retain all rights to the Products outside the Territory, and Aucta shall remain at all times the owner of all Products, Dossier and Aucta Background Intellectual Property worldwide including the Territory. 2.2 ETON, for itself and its Affiliates, hereby grants to Aucta in accordance with the terms and conditions of this Agreement, a right and license, to its trademark, including to its name and logo, that is owned or controlled by ETON or its Affiliates for Aucta (or its authorized Third Party) to make the packs, labels, and leaflets for the Products for sale in the Territory. For avoidance of doubt, ETON and its Affiliates shall remain the owner of its trademarks. 3. PRODUCT DEVELOPMENT AND REGISTRATION 3.1 Development and Registration Responsibilities. 3.1.1 At its sole cost and expense, Aucta shall be responsible and liable for all development and manufacturing activities required for the filing and approval of the Dossiers for the Products in and for the Territory, including without limitation all costs and management of any required pre-approval and post-approval clinical or other studies. 3.1.2 At its sole cost and expense, Aucta shall be responsible and liable for all regulatory activities required for the filing and approval of the Dossiers for the Products in and for the Territory. 3.1.3 Aucta shall provide to ETON all regulatory and compliance-related documents and correspondence with the FDA within five (5) Business Days after submission or receipt of such documents or correspondence with the FDA relating to the Products or Dossiers for the Products, including without limitation any oral (notes thereof) and written correspondence with FDA relating to the Products or Dossiers and any compliance-related oral (notes thereof) or written correspondence with FDA relating to the Product(s)' manufacturing facility(ies)' status or deficiencies. 5

Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019





CONFIDENTIAL 3.1.4 ETON will provide commercially reasonable support on regulatory activities, when requested by Aucta and necessary for approval. 3.2 Registration Maintenance and Regulatory Responsibilities. 3.2.1 Aucta shall hold the approved Dossiers in its name and be responsible for their maintenance. Aucta will take all actions with the FDA, including paying all fees and conducting all communications with FDA or other Governmental Entities as required by Applicable Law in respect of the Dossiers, including without limitation payment of fees owed under the Prescription Drug User Fee Act, Annual Branded Prescription Drug Fees assessed under Section 9008 of the Patient Protection and Affordable Care Act (ACA), Public Law 111-148 (124 Stat. 119 (2010)), as amended by Section 1404 of the Health Care and Education Reconciliation Act of 2010 (HCERA), Public Law 111-152 (124 Stat. 1029 (2010)), or any successor laws, and preparing and filing all required reports (including adverse drug experience reports) with the appropriate Governmental Entity. 3.3 ETON's NDC Numbers. Aucta and its Affiliates shall not sell any products under ETON's or its Affiliates' names or NDC numbers. 3.4 Medical Inquires, Product Complaints and Recalls. ETON, Aucta and a designated third-party contract manufacturer shall share in the responsibility for responding to any medical inquiries or complaints about any Products or addressing any circumstances that may result in a potential recall, market withdrawal, inventory retrieval, or similar action (Recall Event) as set forth in the Pharmacovigilance Agreement attached hereto as Exhibit B (the Pharmacovigilance Agreement) and to be entered into by the Parties and the contract manufacturer as soon as practicable. 3.5 Competitive Products. During the Term of this Agreement, and for a period of two (2) years thereafter, Aucta shall not research, develop, manufacture, file, sell, market, or distribute more than two products containing the active ingredient Lamotrigine; nor will Aucta directly or indirectly assist any other Person or entity in carrying or any such activities. [ * * * ] 4. MANUFACTURE AND SUPPLY 4.1 ETON shall enter into a commercial supply agreement with a contract manufacturing organization and Aucta shall enter into a commercial supply agreement with an active pharmaceutical ingredient supplier within ninety (90) days from the Execution Date unless otherwise agreed to by the parties in writing. 4.2 If the terms of Aucta's commercial supply agreement with the active pharmaceutical ingredient supplier in Section 4.1 is assignable to ETON, ETON may assume the aforementioned agreement by providing written notice to Aucta, and Aucta will have seven (7) days from receipt of the notice to assign the aforementioned agreement to ETON. 6

Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019





CONFIDENTIAL 5. SALES, MARKETING AND DISTRIBUTION 5.1 ETON shall be solely responsible for the Marketing of the Products and shall have sole and exclusive right to make all Marketing decisions for the Product in the Territory, including without limitation to pricing, contracting, sub-licensing, co-promoting, or any contract promotion activities. 5.2 ETON shall use commercially reasonable efforts to Market the Products in the Territory during the Term of this Agreement. 5.3 ETON shall have the sole and exclusive right to determine all terms and conditions of sale of the Products to its or its prospective consumers. 5.4 [ * * * ] 6. MILESTONES AND OTHER PAYMENTS 6.1 Licensing Fees. ETON shall pay to Aucta licensing fees of up to an amount of five million dollars ($5,000,000) based on the following payment schedule: (a) An amount of two million dollars ($2,000,000) within five (5) days of the Effective Date of this Agreement. (b) An amount of two million dollars ($2,000,000) within thirty (30) days after the first commercial sales of Product. [ * * * ] (c) An amount of one million dollars ($1,000,000) within thirty (30) days after the issuance and listing of a patent in the Orange Book for the Product and its Dossier, only if that patent is listed prior to the submission of an ANDA referencing the Product and its Dossier as the reference product. 6.2 Commercial Milestones. ETON shall pay to Aucta a total sum amount of up to eighteen million dollars ($18,000,000) based on Net Sales of a Product (on a Product by Product basis) after the achievement of the following one-time milestones for each Product: (a) An amount of one million dollars ($1,000,000) upon Net Sales first exceeding an amount of ten million dollars ($10,000,000) in a calendar year to be paid within sixty (60) days after the calendar year end. (b) An amount of two million dollars ($2,000,000) upon Net Sales first exceeding an amount of twenty million dollars ($20,000,000) in a calendar year to be paid within sixty (60) days after the calendar year end. (c) An amount of five million dollars ($5,000,000) upon Net Sales first exceeding an amount of fifty million dollars ($50,000,000) in a calendar year to be paid within sixty (60) days after the calendar year end. 7

Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019





CONFIDENTIAL (d) An amount of ten million dollars ($10,000,000) upon Net Sales first exceeding an amount of one hundred million dollars ($100,000,000) in a calendar year to be paid within sixty (60) days after the calendar year end. 6.3 Royalty. 6.3.1 ETON shall pay to Aucta a royalty payment of [ * * * ] of Net Sales of the Products. 6.3.2 [ * * * ] 6.3.3 If the amount of royalty payment under Section 6.3.1 is less than the amount of royalty payment under Section 6.3.2, then ETON shall pay Aucta the difference between royalty payments in Sections 6.3.1 and 6.3.2 within sixty (60) days of the calendar year end, but in no event shall the difference paid be greater than the minimum amount in Section 6.3.2. 6.3.4 For payments under Section 6.3, ETON shall pay Aucta royalty payments under Section 6.3.1 or 6.3.2 only, but not under both sections concurrently. 6.3.5 If ETON is unable or limited in its ability to sell the Products due to supply chain (e.g., manufacturing, API, etc.) or regulatory issues, that extend for a period of thirty (30) days or more, the minimum royalty payment under Section 6.3.2 shall be adjusted to prorate the annual minimum to account for the period of inability to supply; provided, however, that the minimum royalty payment shall be paid if the inability or limitation of sales by ETON is directly and solely due to ETON's gross negligence or willful misconduct. 6.3.6 [ * * * ] 6.3.7 Within thirty (30) days following the end of each Calendar Quarter following the first commercial sale of the Product in the Territory, including the first and last payment period which may be of a shorter duration (each, a Payment Period), ETON shall: (a) compute and report to Aucta in a mutually acceptable format the Net Sales for each Product sold in the Territory during the Payment Period, and (b) pay to Aucta the appropriate royalty payment under Section 6.3 within thirty (30) days of the delivery of the report. 6.4 [ * * * ] 6.5 Interim and Final True-Ups. During the Term, on an annual basis, following the first (1st) calendar year from launch of Product and on a Product-by-Product basis, ETON shall perform an interim true-up reconciliation and shall provide Aucta with a written report of such outlining the deductions specified in the definition of Net Sales. The reconciliation shall be based on actual cash paid or credits issued or accrued in accordance with GAAP and company practices consistently applied, including any amounts irrevocably committed but not yet paid at the end of the preceding calendar year. If the foregoing reconciliation report shows either an underpayment or an overpayment between the Parties, the Party owing payment to the other Party shall pay the amount of the difference to the other Party within thirty (30) days after the date of delivery of such report. In addition, within twenty-five (25) months after the termination or expiration of the Term and on a Product-by-Product basis, ETON shall perform a final true-up reconciliation and shall provide Aucta with a written report of such outlining the deductions specified in the definition of Net Sales. If the foregoing reconciliation report shows either an underpayment or an overpayment between the Parties, the Party owing payment to the other Party shall pay the amount of the difference to the other Party within thirty (30) days after the date of delivery of such report. 8

Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019





CONFIDENTIAL 6.6 Taxes. Each Party shall be responsible for and shall pay all Taxes payable on any income earned or received by it during the Term. Where required by law, ETON shall have the right to withhold applicable Taxes from any payments to be made hereunder by ETON to Aucta. Any Tax, duty or other levy paid or required to be withheld by ETON on account of any payments payable to Aucta under this Agreement shall be deducted from the amount of payments due to Aucta. ETON shall secure and promptly send to Aucta proof of such Taxes, duties or other levies withheld and paid by ETON for the benefit of Aucta. Each Party agrees to cooperate with the other Party in claiming exemptions from such deductions or withholdings under any agreement or treaty from time to time in effect. 6.7 Audits. Each Party shall permit an independent certified public accounting firm selected by the auditing Party and reasonably acceptable to the non-auditing Party, that has agreed to be bound by a confidentiality agreement reasonably acceptable to the Parties, to have access, during normal business hours and upon reasonable prior notice (not more often than once in any calendar year), to those books and records maintained by the non-auditing Party necessary for the auditing Party to verify the accuracy of the non-auditing Party's calculations under this Section 6 and/or cost of Product(s) for any period ending not more than two (2) years prior to the date of such request, subject to any limitations in scope necessary to comply with Applicable Law, Third Party confidentiality restrictions, or maintain legal privilege, including but not limited to Third Party pricing information. All such information shall be retained on a confidential basis by the accounting firm, and such accounting firm's use of such information shall be limited to the aforementioned verification. Unless otherwise agreed to by the Parties in writing, the accounting firm shall not be paid on a contingency or similar basis. 6.8 Accounting. ETON and Aucta shall calculate and record calculations under this Section 6 and with respect to Product(s) cost in accordance with U.S. GAAP, and shall maintain all books and records related thereto in accordance with standard cost accounting policies and practices, in accordance with U.S. GAAP for the Term plus an additional three (3) years thereafter. 7. PATENT PROSECUTION AND LITIGATION 7.1 At its sole cost and expense, Aucta shall be solely responsible and liable for any litigation in connection with the Product's development, and the Aucta Background Intellectual Property other than ANDA Litigation covered below in Section 7.5. 7.2 At its sole cost and expense, ETON shall be solely responsible and liable for any non-patent litigation in connection with its sales and marketing activities. 9

Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019





CONFIDENTIAL 7.3 Patent Prosecution. Each Party shall be responsible, at its own expense, for filing and prosecuting such patent applications, as it deems appropriate, and for paying maintenance fees on any patents issuing therefrom, for the Term, with respect to intellectual property owned by it that relate to or are used in connection with the manufacture, sale or use of the Product. Notwithstanding anything herein to the contrary, and in the event that that the Aucta Background Intellectual Property includes patent(s) and or patent application(s), Aucta, at its sole cost and expense, shall maintain and protect the Aucta Background Intellectual Property and continue to prosecute and maintain its patents included in the Aucta Background Intellectual Property and shall keep ETON advised of material actions relative to the same. Should Aucta contemplate abandoning or otherwise forfeiting any patent/patent applications or patent rights in the Aucta Background Intellectual Property, Aucta shall notify ETON in advance of such contemplation. In such an event, ETON may pursue maintaining such patent(s) or filing and prosecuting such patent applications relating to the Products, at its own cost and expense, and shall obtain from Aucta rights and licenses to those patents and patent applications with the same scope as that in Section 2.1. Aucta shall maintain the confidentiality of any trade secrets included in the Aucta Background Intellectual Property. Each Party shall promptly render all necessary assistance reasonably requested by the other Party, at the requesting Party's expense, in applying for and prosecuting patent applications based on intellectual property owned by such other Party pursuant to this Agreement. 7.4 Notice of Infringement. If either Party shall learn of (a) any claim or assertion that the manufacture, use or marketing of the Product under this Agreement, or any other action taken by either party in performance of its obligations hereunder infringes, misappropriates or otherwise violates the intellectual property rights of any Third Party, or (b) the actual or threatened infringement, misappropriation or other violation by any Third Party of the intellectual property rights of any party that are the subject of this Agreement (Intellectual Rights Suits), then the Party becoming so informed shall as soon as reasonably practicable, but in all events within three (3) Business Days thereafter (the Infringement Notification Date), notify the other Party of such claim or assertion, or actual or threatened infringement, misappropriation or other violation. 7.5 Intellectual Rights Suit. 7.5.1 Other than an ANDA Litigation covered below in Section 7.5.2, Aucta shall at its sole cost and expense be solely responsible and liable for and assume the direction and control of any Intellectual Rights Suit and the defense of claims arising therefrom, including, without limitation, the selection of legal counsel; provided, however, that Aucta shall keep ETON apprised of material developments. ETON shall fully cooperate with Aucta in the defense of any such Intellectual Rights Suit (regardless of which Party is a named party to such suit), including joining as a party to the suit, and shall be consulted by Aucta in connection with the settlement of any such Intellectual Rights Suit. Except as otherwise set forth in this Agreement, Aucta shall be responsible for all reasonable attorneys' fees and costs, settlement amounts and/or awarded damages incurred by Aucta or by ETON at the request of Aucta or with Aucta's approval in connection with the defense of Intellectual Rights Suit covered by this Section 7.5.1 provided such is directly related to this Agreement. 10

Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019





CONFIDENTIAL 7.5.2 If the Intellectual Rights Suit relates to the submission to the FDA of an Abbreviated New Drug Application with a Paragraph IV certification to a patent or patents listed in the Orange Book in connection with the Product's Dossier (ANDA Litigation), then Aucta in consultation and coordination with ETON shall jointly control the ANDA Litigation(s) and the defense of claims arising therefrom, including, without limitation, the selection of legal counsel; provided, however, that in the event of a disagreement about the conduct of the litigation or selection of counsel that is not resolved through good faith negotiation, Aucta shall have the right to make any final decisions. Aucta and ETON shall share equally the costs of litigating any ANDA Litigation and each party shall fully cooperate with the other in any such ANDA Litigation (regardless of which Party is a named party to such suit), including joining as a party to the suit, if necessary. No settlement shall be made of an ANDA Litigation without the consent of both Parties, such consent not to be unreasonably withheld. 7.5.3 The Parties agree that they will not, whether in the context of the Intellectual Rights Suit, ANDA Litigation or otherwise related thereto, without the prior written consent of the other Party enter into any agreement or arrangement with any Third Party which in any way compromises, relinquishes, waives, or otherwise affects, in whole or in part, the rights of the other Party under this Agreement or in respect of the Product, including, without limitation, any patent rights related to the Product. 7.6 Sections 7.1, 7.2 and 7.5 shall survive termination or expiration of this Agreement. 8. INSURANCE At all times from the first commercial sale of any Product(s) or after the Effective Date through the date which is five (5) years after the final sale of such Product(s), the Parties will maintain general liability insurance in amounts that are reasonable and customary in the pharmaceutical industry, provided in no event shall the general liability insurance amounts be less than five million dollars ($5,000,000) per occurrence and ten million dollars ($10,000,000) in the aggregate limit of liability per year. The Parties shall provide written proof of such insurance to each other upon request. 9. CONFIDENTIAL INFORMATION; PUBLICITY 9.1 Confidential Information. Each Party agrees that it shall not, without the prior written consent of the other Party, (i) disclose to any Person such other Party's Confidential Information (as defined below), except to those of its and its Affiliates' employees or representatives who need to know such information for the purpose of exploiting its rights or fulfilling its obligations under this Agreement (and then only to the extent that such persons are under an obligation to maintain the confidentiality of the Confidential Information), or (ii) use any of such other Party's Confidential Information for any reason other than as contemplated by this Agreement. If a Party has been advised by legal counsel that disclosure of Confidential Information of the other Party is required to be made under Applicable Law (including to the FDA or pursuant to the requirements of a national securities exchange or another similar regulatory body on which it's or any of its Affiliates stock trades) or pursuant to documents subpoena, civil investigative demand, interrogatories, requests for information, or other similar process, the Party required to disclose the Confidential Information shall (to the extent legally permitted) provide the other Party with prompt written notice of such request or demands or other similar process so that such other Party may seek an appropriate protective order or waive the disclosing Party's compliance with the provisions of this Section. In the absence of a protective order or waiver or other remedy, the Party required to disclose the other Party's Confidential Information may disclose only that portion of the Confidential Information that its legal counsel advises it is legally required to disclose, provided that it exercises its commercially reasonable efforts to preserve the confidentiality of such other Party's Confidential Information, at such other Party's expense, including by cooperating with such other Party to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Confidential Information. Confidential Information shall remain the sole property of the disclosing Party and all Confidential Information furnished in written form (and all copies thereof) shall be promptly returned to the disclosing Party or destroyed by the receiving Party at the disclosing Party's request; provided, however, that the receiving Party may retain copies of such Confidential Information as necessary for its compliance obligations under Applicable Laws and any archival purposes, subject to the ongoing obligation to maintain the confidentiality of such information. This Section 9.1 shall survive termination or expiration of this Agreement and continue in effect thereafter for a period of five (5) years. 11

Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019





CONFIDENTIAL 9.2 Definition of Confidential Information. The term Confidential Information as used in this Agreement means all confidential information relating to the Parties' business and operation, this Agreement's term sheet, this Agreement and its terms, or other technical, business or financial information provided by the Parties as contemplated by this Agreement. The term Confidential Information does not include information that (A) becomes generally available to the public other than as a result of disclosure by the receiving Party, (B) becomes available to the receiving Party on a non-confidential basis from a source other than the disclosing Party, provided that such source is not known by the receiving Party to be bound by a confidentiality agreement with the disclosing Party, (C) was previously known by the receiving Party as evidenced by the receiving Party's written records, or (D) was independently developed by the receiving Party without use of or reliance on the Confidential Information. 9.3 Public Announcement. Neither ETON, Aucta nor any of their respective Affiliates shall issue any press release or make any public announcement with respect to this Agreement and the transactions contemplated hereby without obtaining the prior written consent of the other Party, except as may be required by Applicable Law or stock exchange rules on which a Party or its Affiliates stock trades. 10. TRANSFER TAXES All transfer, sales, value added, stamp duty and similar Taxes (Transfer Taxes) payable to the U.S. government in connection with the transaction contemplated hereby will be borne by ETON and all Transfer Taxes payable to an ex-U.S. government in connection with the transaction contemplated hereby will be borne by Aucta. 12

Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019





CONFIDENTIAL 11. TERM AND TERMINATION 11.1 Term. The term of this Agreement shall automatically become effective upon the occurrence of (i) ETON executing a commercial supply agreement with a contract manufacturing organization within forty-five (45) days of the Execution Date, provided that ETON has exercised best efforts to execute such agreement and the failure to execute is solely caused by the refusal or inability of the proposed manufacturing organization to sign a reasonable agreement; and (ii) acceptance for review of the Dossier or marketing application for [ * * * ] by the FDA no later than September 2, 2019 (such date, the Effective Date) and shall end upon the termination or expiration of the Agreement as set forth in Section 11 (the Term). For avoidance of doubt, all rights conferred to ETON under this Agreement for the purpose of allowing ETON to Market the Product in the Territory shall continue until a Party terminates this Agreement. Aucta should continue to receive 15% of Net Sales Royalty for as long as ETON is selling the Product(s) in the Territory, unless otherwise agreed to under this Agreement. The obligations of ETON to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or ETON's waiver of the occurrence of the Effective Date. 11.2 Termination for Breach. The Agreement may be terminated by either Party by written notice to the other at any time if the other Party (the Breaching Party) is in material breach or default of any of its obligations hereunder or any of its representations or warranties as follows: (i) the terminating Party shall send a written notice of the material breach or material default to the Breaching Party and (ii) the termination shall become effective a) thirty (30) days after sending notice of the breach if the breach is non-payment of amounts due hereunder, such as milestone, minimum royalty or royalties amounts and b) sixty (60) days after sending notice of the breach for all other breaches unless the Breaching Party has cured any such material breach or material default prior to the expiration of the thirty (30) or sixty (60) day period as the case may be; or if for non- payment breaches such material default or material breach is not capable of being cured within such sixty (60) day period and the Breaching Party has commenced activities reasonably expected to cure such material breach or material default within such sixty (60) day period and thereafter uses diligent efforts to complete the cure as soon as practicable, but in no event shall such period exceed ninety (90) days. 11.3 Termination for Bankruptcy. Either Party may immediately terminate the Agreement in whole or in part if the other Party: (a) makes an assignment for the benefit of creditors, admits in writing its inability to pay debts as they mature, or ceases operating in the normal course of business; (b) has a receiver or trustee appointed by a court over the Party or any substantial part of the Party's assets; (c) becomes insolvent or is unable to pay its debts as they become due; (d) authorizes, applies for or consents to the appointment of a trustee or liquidator of all or a substantial part of its assets or has proceedings seeking such an appointment commenced against it which are not terminated within ninety (90) days of such commencement; (e) has any substantial part of its property subjected to any levy, seizure, assignment or sale for, or by any creditor or governmental agency without said levy, seizure, assignment or sale being lifted, released, reversed or satisfied within ten (10) days; (f) files a voluntary petition under any chapters of the United States Bankruptcy Code or any other insolvency law or an involuntary proceeding has been commenced by any Party against the Party under any one of the chapters of the United States Bankruptcy Code or any other insolvency law and (A) the proceeding has been pending for at least sixty (60) days; or (B) the Party has consented, either expressly or by operation of law, to the entry of an order for relief; or (C) the Party has been decreed or adjudged a debtor or equivalent. 13

Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019





CONFIDENTIAL 11.4 Termination Other than for Breach or Insolvency. (a) ETON has the right to terminate this Agreement at any time at its sole discretion if the Dossier or marketing application for the Product is not approved by December 31, 2020 or at a later time if agreed to in writing by the Parties. (b) ETON has the right to terminate this Agreement after approval of the Dossier or marketing application for the Product (or added new product), at its sole discretion, upon providing one hundred eighty (180) days' written notice to Aucta. (c) If Aucta terminates under Section 11.2 or 11.3, or if ETON terminates under Section 11.4(b), ETON shall continue to market the Products as before notice of termination, receive revenue and pay associated costs for selling the Product(s) during any notice period. After termination is effective and Aucta assumes control of the Product, ETON will provide, to the extent practicable, transition services to Aucta to include assistance with Product distribution, processing of rebates, drug safety, etc. at Aucta's cost for such services, for a reasonable period of time as mutually determined by the Parties but not to exceed one hundred eighty (180) days following termination so that Aucta can get its own such services in place. The Parties shall determine the rate for such additional transition services as may be required. The objective of this clause is to provide reasonable assurance that a termination does not disrupt the supply of Product)s) to the market if possible and both parties shall work in good faith to try and avoid any disruption in the marketing or supply of Products during termination and transfer of Products sales back to Aucta. 11.5 Effect of Termination or Expiration: Surviving Obligations. 11.5.1 If this Agreement is terminated by ETON (i) under Section 11.3, in addition to any remedies that ETON is entitled to, then (a) Aucta shall transfer ownership of the Dossiers to an Aucta shareholder-controlled entity to enable ETON to continue to commercialize the Products in the Territory; or (ii) under Section 11.4(a) and (b), in addition to any remedies that ETON is entitled to, then (a) Aucta may keep all the payments under Section 6 paid by ETON up to the point of termination, (b) all rights of Aucta granted to ETON shall revert to Aucta, and (c) ETON shall request consent from the contract manufacturing organization (if necessary) that the commercial supply agreement with the contract manufacturing organization be assigned to Aucta. 11.5.2 If this Agreement is terminated by Aucta under Section 11.2 or 11.3, then (a) ETON shall have the right to, and Aucta shall hereby grant ETON a license to, Market or otherwise dispose of any existing inventory of any Products then in ETON's possession subject to paying all Royalties and other amounts due hereunder for such sales, (b) Aucta may keep all the payments under Section 6 paid by ETON up to the point of termination and for ETON's disposal of remaining inventory and Aucta is free to commercialize or relicense the Product with no further obligations owed to ETON, (c) ETON shall refrain from holding itself out as Aucta's distributor, in particular, eliminate any reference to the Product and Aucta from its business, trade style and promotional material, and (d) ETON shall transfer all rights, licenses within thirty (30) days of termination. 14

Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019





CONFIDENTIAL 11.5.3 This Section 11.5 shall survive termination or expiration of this Agreement. 12. REPRESENTATIONS AND WARRANTIES 12.1 ETON Representations and Warranties. ETON represents and warrants to Aucta that: 12.1.1 it has the corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby; 12.1.2 neither the execution and delivery of this Agreement by it, nor its performance hereunder, conflicts with or will result in any violation or breach of, or constitutes (with or without due notice or lapse of time or both) a default under any of the terms or conditions of any note, indenture, license, agreement or other instrument or obligation to which it is a party or by which it or any of its properties or assets may be bound; or to its best knowledge, violates any Applicable Law; 12.1.3 this Agreement is a legal, valid and binding agreement of ETON, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity (including concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at law; and 12.1.4 it has not been debarred, is not subject to debarment, and will not use, in any capacity in connection with the obligations to be performed under this Agreement, any person who has been debarred pursuant to Section 306 of the United States Food, Drug and Cosmetic Act; 12.1.5 there is no Claim, suit, investigation, action or proceeding pending or threatened against ETON before any court, governmental agency, or arbitration panel which may in any way materially adversely affect the performance of its obligations hereunder or transaction contemplated by this Agreement; 12.1.6 it has not and will not enter into any contract or any other transaction with any Third Party or Affiliate that conflicts with or derogates from its undertakings hereunder; 12.1.7 it has and will at all times during Term have requisite expertise, experience, personnel, equipment and skill to perform its obligations hereunder; and 12.1.8 it has obtained or will maintain to the extent necessary for its performance of activities with respect to the Products under this Agreement all required licenses, authorizations, and approvals required by federal, state, or local governmental authorities, including the FDA and any other applicable regulatory agency to the extent it is selling, supplying, manufacture, export and supply each Product for the Territory and in accordance with this Agreement 15

Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019





CONFIDENTIAL 12.1.9 it will not make nor will it promise to make any payment in violation of the U. S. Foreign Corrupt Practices Act or similar applicable local, federal or national law. 12.2 Aucta Representation and Warranties. Aucta represents and warrants to ETON that: 12.2.1 it has the corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby; 12.2.2 neither the execution and delivery of this Agreement by it, nor its performance hereunder, conflicts with or will result in any violation or breach of, or constitutes (with or without due notice or lapse of time or both) a default under any of the terms or conditions of any note, indenture, license, agreement or other instrument or obligation to which it is a Party or by which it or any of its properties or assets may be bound; or to its best knowledge, violates any Applicable Law; 12.2.3 this Agreement is a legal, valid and binding agreement of Aucta, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity (including concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at law; 12.2.4 it has not been debarred, is not subject to debarment, and will not use, in any capacity in connection with the obligations to be performed under this Agreement, any person who has been debarred pursuant to Section 306 of the United States Food, Drug and Cosmetic Act; 12.2.5 there is no Claim, suit, investigation, action or proceeding pending or threatened against Aucta before any court, governmental agency, or arbitration panel which may in any way materially adversely affect the performance of its obligations hereunder or transaction contemplated by this Agreement; 12.2.6 it will not divest, sell, fail to maintain or otherwise dispose of any Dossier related to Products during the Term of this Agreement; 12.2.7 it has not and will not enter into any contract or any other transaction with any Third Party or Affiliate that conflicts with or derogates from its undertakings hereunder; 12.2.8 it has and will at all times during Term have requisite expertise, experience, personnel, equipment and skill to perform its obligations hereunder; 12.2.9 it has the unencumbered right to Products, Dossiers for the Products and Aucta Background Intellectual Property and the right, power and authority to grant a license to ETON hereunder; 16

Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019





CONFIDENTIAL 12.2.10 it will not make nor will it promise to make any payment in violation of the U. S. Foreign Corrupt Practices Act or similar applicable local, federal or national law; 12.2.11 it has obtained and will maintain all required licenses, authorizations, and approvals required by federal, state, or local governmental authorities, including the FDA and any other applicable regulatory agency to manufacture, export and supply each Product for the Territory and in accordance with this Agreement; 12.2.12 all Product supplied to ETON by Aucta or its contract manufacturer shall: (i) meet the applicable Specifications at the time of shipment; (ii) meet regulatory requirements of any relevant regulatory authority in the Territory and Territory of Manufacture; (iii) be manufactured, packaged, tested, stored and shipped in accordance with applicable GMP, the Dossier, Applicable Law and this Agreement; (iv) not be adulterated or misbranded under the U. S. Food, Drug and Cosmetic Act or any other relevant laws and regulations as amended from time to time; and (v) be produced, packaged, tested and stored in facilities that have been approved by applicable regulatory authorities to the extent required by Applicable Laws; 12.2.13 Aucta has not been informed of any proceeding or similar action pending or threatened in writing seeking the revocation, suspension or amendment of any Dossiers for reasons related to safety or efficacy; 12.2.14 The FDA has not requested or demanded in writing that Aucta discontinue any Dossiers for reasons related to safety or efficacy; 12.2.15 Aucta has not been informed of any pending or threatened in writing product liability claims relating to any Product; and 12.2.16 Aucta has not been informed of any pending or threatened in writing Claims alleging infringement of a Third Party's intellectual property rights relating to any Dossiers or the use, manufacture, import, distribution, sale or offer for sale of any Product. 12.3 Survival of Representations and Warranties. Other than the representations of Sections 12.1.5, 12.2.13, 12.2.14, 12.2.15 and 12.2.16, which are made as of the date of execution of this Agreement, all representations and warranties of ETON and Aucta contained herein or made pursuant hereto shall be ongoing during the Term and for a period of twelve (12) months thereafter. In the event of any breach of the representations and warranties set forth herein, the applicable Party shall immediately notify the other Party of such breach. 13. INDEMNIFICATION 13.1 Aucta's Indemnification Obligations. Aucta shall indemnify, defend and hold ETON and its owners, officers, directors, Affiliates, and employees (collectively, ETON Indemnified Parties) harmless from and against any and all Losses arising out of or resulting from any Third Party Claims made or suits brought against ETON Indemnified Parties which arise or result from (i) Aucta's material breach of any of its representations, warranties or covenants set forth in this Agreement, or any of its obligations hereunder; (ii) Aucta's manufacture, registration, handling, storage, use, transportation of any Product on or after the Effective Date, including, without limitation, any Claim for personal injury or death, to the extent such Third Party Claims arise from the period of time commencing on or after the Effective Date and to the extent such is not attributable to ETON's breach of this Agreement or any Applicable Laws; or (iii) Aucta's negligence or willful misconduct with regard to the Products to the extent such is not attributable to ETON's breach of this Agreement or any Applicable Laws. 17

Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019





CONFIDENTIAL 13.2 ETON's Indemnification Obligations. ETON shall indemnify, defend and hold Aucta and its officers, directors, and employees (collectively, Aucta Indemnified Parties) harmless from and against any and all Losses arising out of or resulting from any Third Party Claims made or suits brought against Aucta Indemnified Parties which arise or result from (i) ETON's material breach of any of its representations, warranties or covenants set forth in this Agreement, or any of its obligations hereunder; (ii) ETON's marketing, distribution, or sale of any Product on or after the Effective Date, including, without limitation, any Claim for personal injury or death, to the extent such Third Party Claims arise from the period time commencing on or after the Effective Date and to the extent such is not attributable to Aucta's breach of this Agreement or any Applicable Law; or (iii) ETON's negligence or willful misconduct with regard to the Products to the extent such is not attributable to Aucta's breach of this Agreement or any Applicable Laws. 13.3 Indemnification Procedure. 13.3.1 Notice of the matter which may give rise to such Claim shall be given in writing by the indemnitee (the Indemnitee) to the Party against whom indemnification may be sought (the Indemnitor) as soon as reasonably practicable after such Indemnitee becomes aware of such Claim; provided, however, that the failure to notify the Indemnitor shall not relieve it from any liability that it may have to the Indemnitee otherwise unless the Indemnitor demonstrates that the defense of the underlying Claim has been materially prejudiced by such failure to provide timely notice. Such notice shall request indemnification and describe the potential Losses and Claim giving rise to the request for indemnification, and provide, to the extent known and in reasonable detail, relevant details thereof. If the Indemnitor fails to give Indemnitee notice of its intention to defend any such Claim as provided in this Section 13.3.1. the Indemnitee involved shall have the right to assume the defense thereof with counsel of its choice, at the Indemnitor's expense, and defend, settle or otherwise dispose of such Claim with the consent of the Indemnitor, not to be unreasonably withheld or delayed. 13.3.2 In the event the Indemnitor elects to assume the defense of a Claim, the Indemnitee of the Claim in question and any successor thereto shall permit Indemnitor's counsel and independent auditors, to the extent relevant, reasonable access to its books and records and otherwise fully cooperate with the Indemnitor in connection with such Claim; provided, however, that (i) the Indemnitee shall have the right fully to participate in such defense at its own expense; (ii) the Indemnitor's counsel and independent auditors shall not disclose any Confidential Information of the Indemnitee to the Indemnitor without the Indemnitee's consent; (iii) access shall only be given to the books and records that are relevant to the Claim or Losses at issue. The defense by the Indemnitor of any such actions shall not be deemed a waiver by the Indemnitee of its right to assert a Claim with respect to the responsibility of the Indemnitor with respect to the Claim or Losses in question. The Indemnitor shall not have the right to settle or compromise any Claim against the Indemnitee (that the Indemnitor has defended pursuant to this Section 13.3.2) without the consent of the Indemnitee which shall not be unreasonably withheld or delayed. No Indemnitee shall pay or voluntarily permit the determination of any Losses which is subject to any such Claim while the Indemnitor is negotiating the settlement thereof or contesting the matter, except with the prior written consent of the Indemnitor, which consent shall not be unreasonably withheld or delayed. 18

Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019





CONFIDENTIAL 13.3.3 This Section 13 shall survive termination or expiration of this Agreement. 14. LIMITATION OF LIABILITY 14.1 NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES, WHETHER FORESEEABLE OR NOT, THAT ARE IN ANY WAY RELATED TO THIS AGREEMENT. 15. MISCELLANEOUS 15.1 Governing Law; English Language. This Agreement shall be governed, interpreted and construed in accordance with the substantive laws of the Delaware, in the country of the United State of America, without regard to its conflict of laws principles. To the extent that it may otherwise by applicable, the Parties hereby expressly agree to unconditionally waive and exclude from the operation of this Agreement the United Nations Convention on Contracts for the International Sale of Goods, concluded at Vienna, on 11 April 1980, as amended and as may be amended further from time to time. This Agreement has been negotiated and drafted by the Parties in the English language. Any translation into any other language shall not be an official version thereof. In the event any translation of this Agreement is prepared for convenience or for any other purpose, the provisions of the English version shall prevail. 15.2 Force Majeure. Neither Party shall be liable for non-performance or delay in the fulfillment of its obligations when any such non- performance or delay shall be occasioned by any unforeseeable cause beyond the reasonable control of Aucta or ETON, as the case may be, including without limitation, acts of God, fire, flood, earthquakes, explosions, sabotage, strikes or labor disturbances, civil commotion, riots, military invasions, war, terrorism, failure of utilities, failure of carriers, or any acts, restraints, requisitions, tariffs, regulations, or directives issues by a Governmental Entity (Force Majeure Events). In the event either Party is prevented from discharging its obligations hereunder on account of a Force Majeure Event, such Party shall notify the other forthwith and shall nevertheless make every endeavor in good faith to discharge its said obligations even if in a partial or compromised manner. If either Party is unable to perform its obligations hereunder as a result of a Force Majeure Event for a period of thirty (30) days or greater, then the other Party shall have the right, following sixty (60) days' notice to the other Party to terminate the Agreement if the Force Majeure Event still exists following such sixty (60) day notice period. In the event Force Majeure Event impacts the manufacture or supply of Products, the annual minimums required under 6.3.2 shall be suspended for the period of the Force Majeure and the annual minimum adjusted to prorate the annual minimum to account for the period of Force Majeure suspension (e.g. one month Force Majeure reduces annual minimum by 1/12). 19

Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019





CONFIDENTIAL 15.3 Notices. All notices and other communications required or permitted to be given or made pursuant to this Agreement shall be in writing signed by the sender and shall be deemed duly given (a) on the date delivered, if personally delivered, (b) on the date sent by telecopier with automatic confirmation by the transmitting machine showing the proper number of pages were transmitted without error, (c) on the Business Day after being sent by Federal Express or another recognized overnight mail service which utilizes a written form of receipt for next day or next Business Day delivery or (d) three (3) Business Days after mailing, if mailed by U.S. postage-prepaid certified or registered mail, return receipt requested, in each case addressed to the applicable Party at the address set forth below; provided that a Party may change its address for receiving notice by the proper giving of notice hereunder: If to ETON, to: ETON Pharmaceuticals, Inc. 21925 W. Field Pkwy, Suite 235 Deer Park, Illinois, USA Attention: CEO With a copy (which shall not constitute notice) to: ETON Pharmaceuticals, Inc. 21925 W. Field Pkwy, Suite 235 Deer Park, Illinois, USA Attention: Legal if to Aucta, to: Aucta Pharmaceuticals, Inc. 71 Suttons Lane Piscataway, NJ 08854 Attention: CEO 15.4 Relationship of Parties. The status of the Parties under this Agreement shall be that of independent contractors, without the authority to act on behalf of or bind each other. Nothing in this Agreement shall be construed as establishing a partnership or joint venture relationship between the Parties hereto. No Party shall have the right to enter into any agreements on behalf of the other Party, nor shall it represent to any person that it has such right or authority. All persons employed by a Party shall be employees of such Party and not of the other Party and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such Party. 20

Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019





CONFIDENTIAL 15.5 Entire Agreement; Amendment. This Agreement (and all Exhibits attached hereto) supersedes all prior discussions and agreements among the Parties with respect to the subject matter hereof and contains the sole and entire agreement among the Parties hereto with respect to the subject matter hereof. This Agreement may not be amended or modified except in writing executed by the duly authorized representatives of the Parties. 15.6 No Third-Party Beneficiaries. This Agreement is not intended to confer upon any Person other than the Parties hereto any rights or remedies hereunder. 15.7 Severability. Should any part or provision of this Agreement be held unenforceable or in conflict with Applicable Law, the invalid or unenforceable part or provision shall, provided that it does not affect the essence of this Agreement, be replaced with a revision which accomplishes, to the greatest extent possible, the original commercial purpose of such part or provision in a valid and enforceable manner, and the balance of this Agreement shall remain in full force and effect and binding upon the Parties hereto. 15.8 Assignment. The terms and provisions hereof shall inure to the benefit of, and be binding upon the Parties and their respective successors and permitted assigns. The Parties shall not assign, encumber or otherwise transfer this Agreement or any part of it to any Third Party, without the prior written consent of the other Party. Notwithstanding the foregoing, each Party may assign the rights and obligations under this Agreement in whole, without consent of the other Party, to a Third Party or Affiliate in connection with the transfer or sale of all or substantially all of its business or in the event of a merger, consolidation or change in control provided that the assignee assumes in writing and becomes directly obligated to the other Party to perform all of the obligations of assignor under this Agreement. 15.9 Waiver. No waiver of a breach or default hereunder shall be considered valid unless in writing and signed by the Party giving such waiver, and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or similar nature. 15.10 Survival. Any provision which by its terms is intended to survive the termination or expiration of this Agreement will survive the termination or expiration of this Agreement and remain in full force and effect thereafter. 15.11 Counterparts; PDF. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original but all of which, taken together, shall constitute one and the same instrument. PDF and facsimile signatures shall constitute original signatures. The Parties agree that the electronic signatures appearing on this Agreement are the same as handwritten signatures for the purposes of validity, enforceability and admissibility pursuant to the Electronic Signatures in Global and National Commerce (ESIGN) Act of 2000, and Uniform Electronic Transactions Act (UETA) model law, or similar applicable laws. [SIGNATURE PAGE FOLLOWS] 21

Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019





CONFIDENTIAL IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written, to be effective upon the Effective Date. ETON PHARMACEUTICALS, INC. By: Name: Title: AUCTA PHARMACEUTICALS, INC. By: Name: Title:

Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019





Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 
Question: Highlight the parts (if any) of this contract related to Insurance that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?
answer:
At all times from the first commercial sale of any Product(s) or after the Effective Date through the date which is five (5) years after the final sale of such Product(s), the Parties will maintain general liability insurance in amounts that are reasonable and customary in the pharmaceutical industry, provided in no event shall the general liability insurance amounts be less than five million dollars ($5,000,000) per occurrence and ten million dollars ($10,000,000) in the aggregate limit of liability per year.


question:
-1 -                                            TELKOM CONTRACT No. 076C/01   LICENCE AND MAINTENANCE AGREEMENT   entered into by and between   SYSTEMS APPLICATIONS PRODUCTS (AFRICA) (PTY) LIMITED   (SAP AFRICA)   a company incorporated in accordance with the laws of the Republic of South Africa   with offices at SAP Business Park, 1 Woodmead Drive, Woodmead, Sandton   and   TELKOM SOUTH AFRICA LIMITED   (TELKOM)   a company incorporated in accordance with the laws of the Republic of South Africa with   its head office at 152 Proes Street, Pretoria



- 2 -                                             TELKOM CONTRACT No. 076C/01   1.     RECORDAL   It is recorded that:   1. 1.     SAP AFRICA wishes to grant to TELKOM and TELKOM wishes to accept from   SAP AFRICA a licence to use the SOFTWARE (as defined in clause 2. 3. 11),   upon the terms and conditions hereinafter set forth.   1. 2.     The SOFTWARE to be licensed in terms hereof will enable TELKOM to establish,   manage and operate an Internet-based business platform for TELKOM'S e-   commerce exchange, that is, a Marketplace as defined in clause 3. 9.   1. 3.    The parties record their agreement in this document that, upon signature by the   party signing last in time, shall supercede and prevail over all other arrangements   and agreements between them as to its subject matter.   2.     INTERPRETATION AND DEFINITIONS   In this AGREEMENT:   2. 1.     clause headings are for convenience and shall not be used in its interpretation;   2. 2.     unless the context clearly indicates a contrary indication -   2. 2. 1.         an expression which denotes -   2. 2. 1. 1.             any gender includes the other genders;   2. 2. 1. 2.             a natural person includes an artificial person and vice versa;   2. 2. 1. 3.             the singular includes the plural and vice versa;



- 3 -                                             TELKOM CONTRACT No. 076C/01   2. 3.      the following expressions shall bear the meanings assigned to them below and   cognate expressions bear corresponding meanings -   2. 3. 1.         AFFILIATE means a company located in the TERRITORY that is a   subsidiary of TELKOM as defined in the Companies Act of 1973, as   amended, provided that should any such entity cease, for whatever reason,   to be a subsidiary of TELKOM, then it shall ipso facto cease to be an   AFFILIATE for the purposes of this AGREEMENT and the provisions of   clause 6. 4 shall apply to such entity;   2. 3. 2.        BUSINESS THIRD PARTIES means those persons or entities who are   authorised by TELKOM to access and/or USE the SOFTWARE in terms of   formal arrangements that TELKOM has with such persons or entities;   2. 3. 3.        COMMERCE ONE INC.  means a company incorporated in accordance   with the Laws of Switzerland with its head offices in Zurich;   2. 3. 4.        DESIGNATED SITE means those facilities of TELKOM located in the   TERRITORY in which one or more DESIGNATED UNITS are located and   which initially is/are defined in annexure 1 to this AGREEMENT or, for   additional DESIGNATED SITES, as may be agreed upon in writing by the   parties;   2. 3. 5.        DESIGNATED UNIT means an individual computer server located at a   DESIGNATED SITE upon which the SOFTWARE is installed. Each   DESIGNATED UNIT must be approved by SAP AFRICA as compatible with   the SOFTWARE and must be identified in annexure 1 hereto or, for   additional DESIGNATED UNITS as may be agreed upon in writing by the   parties;



- 4 -                                             TELKOM CONTRACT No. 076C/01   2. 3. 6.       DOCUMENTATION  means SAP AFRICA's standard DOCUMENTATION   in machine readable format in any medium that is delivered to TELKOM   under this AGREEMENT, including SAP AFRICA's standard manuals,   program listings, data models, flow charts, logic diagrams, input and output   forms, functional specifications, instructions and complete or partial copies   of the aforegoing;   2. 3. 7.       PROGRAM CONCEPTS means the concepts, techniques, ideas and   know-how embodied and expressed in any computer programs or modules   included in the SOFTWARE, including the structure, sequence and   organisation of such programs and modules;   2. 3. 8.       PROPRIETARY INFORMATION means: -   2. 3. 8. 1.           with respect to SAP AFRICA, the SOFTWARE and   DOCUMENTATION and any complete or partial copies thereof, the   PROGRAM CONCEPTS and any other information identified or   reasonably identifiable as confidential and PROPRIETARY   INFORMATION of SAP, SAP AG, or each of their respective   licensors, whether marked with proprietary legend or not (SAP   AFRICA'S PROPRIETARY INFORMATION);   2. 3. 8. 2.           with respect to TELKOM, information identified or reasonably   identifiable, as the confidential and PROPRIETARY INFORMATION   of  TELKOM, whether marked with proprietary legend or not   (TELKOM's PROPRIETARY INFORMATION),   excluding any part of the SAP's or TELKOM's PROPRIETARY   INFORMATION which: -



- 5 -  TELKOM CONTRACT NO. 076C/01   2. 3. 8. 2. 1.        is, or becomes, publicly available through no act or failure of the         other party; or   2. 3. 8. 2. 2.        was or is rightfully acquired by the other party from a source other         than the disclosing party prior to receipt from the disclosing party;         or   2. 3. 8. 2. 3.        becomes independently available to the other party as a matter of         right;   2. 3. 9.              RELEASE means each issue of the SOFTWARE by SAP AG and its         licensors that incorporates the most recent technological functionality and is         identified by the numeral to the left of the decimal point (e. g. 2. 0);   2. 3. 10.            SAP AG means SAP Aktiengesellschaft Systeme, Anwendungen,         Produkte in der Datenverarbeitung, a German corporation, with its head         office located in Walldorf, Germany. For the purposes of this         AGREEMENT, and if required by the context, the phrase SAP AG shall be         deemed to include its licensors, particularly, COMMERCE ONE INC.. Inc, a         company incorporated in accordance with the laws of Switzerland with its         head office at Zurich, Switzerland;   2. 3. 11.         SOFTWARE means:   2. 3. 11. 1.                the SOFTWARE specified in annexure 1 hereto, in machine - or          human - readable form that is licensed to TELKOM hereunder;   2. 3. 11. 2.                any RELEASES, VERSIONS or correction levels of the          SOFTWARE; and



- 6 -                                             TELKOM CONTRACT No. 076C/01   2. 3. 11. 3.          any complete or partial copies or replacements of any of the   aforegoing;   2. 3. 11. 4.          TERRITORY means, for the purposes of USING the SOFTWARE,   all countries in. AFRICA;   2. 3. 11. 5.          THIRD-PARTY DATABASE means a third party proprietary   database or databases or portions thereof that are listed in annexure   1 and such other THIRD PARTY DATABASES that TELKOM may   require in the future;   2. 3. 11. 6.          TRANSACTION USE means USE including remote USE and   access to the SOFTWARE by any method by TELKOM or third   parties which results in a transaction as measured by the processor   incorporated in the SOFTWARE;   2. 3. 11. 7.         USE means to load, execute, employ, utilise, access, store process   information that results in TRANSACTION USE or display of the   SOFTWARE within the TERRITORY. USE is deemed to occur where   any such USE occurs by TELKOM, its AFFILIATES or their   respective employees or BUSINESS THIRD PARTIES authorised by   TELKOM in terms of formal arrangements, to USE the SOFTWARE   and, for the purposes of this AGREEMENT, TELKOM shall permit the    SOFTWARE to be USED only within the TERRITORY;   2. 3. 11. 8.          VERSIONS means each issue of each RELEASE of the   SOFTWARE developed by SAP AG, or its licensors, which has   incorporated further development work within the technology of that   RELEASE.



- 7 -  TELKOM CONTRACT No. 076C/01   2. 4.  Any reference to any legislation is to such legislation at the signature date as     amended or re-enacted from time to time.   2. 5.  All schedules and annexures to this AGREEMENT shall be deemed to be     incorporated in, and form part of, this AGREEMENT.   2. 6.  If any of the aforesaid definitions contains a substantive provision, effect shall be     given thereto as if it were contained in the body of this AGREEMENT.   2. 7.  Where any time period is stipulated in days, then same shall exclude Saturdays,     Sundays and all statutory public holidays provided that any reference in annexure     2 to days, shall include Saturdays, Sundays and statutory public holidays.   2. 8.  Should any provision contain a provision for the benefit of a third party, whether     named or not, then such third party shall be entitled to accept the benefits     conferred in terms thereof, within 30 days of being notified of such benefit. It is     recorded for the avoidance of doubt that the provisions of this AGREEMENT shall     not in the normal course, be disclosed other than to the parties hereto and their     respective employees.   3.  LICENSE   3. 1.  Subject to the provisions of this AGREEMENT, and with effect from the date   when the party signing last in time appends its signature to this agreement (the   effective date), and enduring in perpetuity unless terminated as provided for   elsewhere in this AGREEMENT, SAP AFRICA grants, and TELKOM accepts a   non-exclusive, non-transferable licence to USE the SOFTWARE,   DOCUMENTATION and other SAP AFRICA PROPRIETARY INFORMATION at   the specified DESIGNATED SITE within the TERRITORY.



- 8 -  TELKOM CONTRACT NO. 076C/01   3. 2.     TELKOM agrees that, subject to the provisions of clause 3. 9, the license granted   in terms hereof does not permit TELKOM to:   3. 2. 1.         USE the SOFTWARE and THIRD-PARTY DATABASE in a manner that   allows access to, and USE, (including TRANSACTION USE) directly or   indirectly, to the SOFTWARE by third parties (other than BUSINESS   THIRD PARTIES), whether on TELKOM'S hardware or otherwise; or   3. 2. 2.        sublicense the SOFTWARE to any person or entity in a manner that allows   such person or entity to provide the same or similar services as those   provided by TELKOM utilising the SOFTWARE alone.   3. 3.     TELKOM shall install the SOFTWARE only on the DESIGNATED UNIT located at   the DESIGNATED SITE as agreed to by the parties in annexure 1 hereto.   TELKOM further agrees to USE the SOFTWARE only in accordance with the   DOCUMENTATION or as may otherwise be agreed in writing by SAP AFRICA,   which may not be unreasonably withheld. TELKOM may connect multiple   application servers to each DESIGNATED UNIT and connect a network of   computer terminals and workstations to the application servers. TELKOM may   install the software on another DESIGNATED UNIT for disaster recovery and   business continuity purposes. It is recorded for the avoidance of doubt that   TELKOM shall not be entitled to install the SOFTWARE on another   DESIGNATED UNIT or other hardware situated at another site within the   TERRITORY for the purposes of establishing and operating a Marketplace as   defined in clause 3. 9.   3. 4.     TELKOM may transfer the SOFTWARE from one DESIGNATED UNIT to another   at a licensed DESIGNATED SITE upon prior written notice to SAP AFRICA. The



- 9 -  TELKOM CONTRACT No. 076C/01   SOFTWARE must be deleted in its entirety within 90 days from such transfer   from the DESIGNATED UNIT no longer in use.   3. 5.  If TELKOM is unable to use the SOFTWARE on a DESIGNATED UNIT because   of conditions beyond its control, TELKOM may temporarily install the   SOFTWARE on other equipment located within the TERRITORY until such   condition is corrected, provided that TELKOM shall ensure that:   3. 5. 1.  the temporary installation shall not impair TELKOM'S ability to prevent any        third party's USE of the SOFTWARE; and   3. 5. 2.  TELKOM shall notify SAP AFRICA in writing within 30 days of the location        of such temporary installation.   3. 6.  TELKOM is licensed to install at the DESIGNATED SITE no more than 1 (one)   copy of the SOFTWARE on the DESIGNATED UNIT utilised for testing and   backup purposes The DESIGNATED UNIT utilised for testing and backup   purposes of the SOFTWARE, must be of the same type as those used at the    DESIGNATED SITE for USE. Only 1 (one) copy of the SOFTWARE is licensed   for USE on the DESIGNATED UNIT at the DESIGNATED SITE, unless   otherwise agreed upon in writing by SAP AFRICA.   3. 7.  Subject to the provisions of the Escrow Agreement embodied in annexure 3   hereto, TELKOM shall have no right to claim or to be supplied with the basis   source code or the production and maintenance DOCUMENTATION for the   SOFTWARE, except as may otherwise be agreed in writing by the parties hereto   and by SAP AG.



- 10 -  TELKOM CONTRACT NO. 076C/01   3. 8.   Unless agreed by the parties to the contrary, TELKOM may only USE the   program modules referred to in the definition of SOFTWARE even if TELKOM is   technically able to USE other modules from the SOFTWARE supplied.   3. 9.   It is recorded that the SOFTWARE licensed in terms of this AGREEMENT, and   its functionality, enables, and is to be USED to establish, operate and administer   a central Internet/Web based market or e-commerce exchange (a   Marketplace), for USE by TELKOM, it's employees and BUSINESS THIRD   PARTIES for the purposes of:   3. 9. 1.   buying or selling, or offering to buy or sell, products and/or services;   3. 9. 2.   providing or being supplied with, or offering to provide or supply,   information and/or accessing or USING the SOFTWARE or any   functionality thereof to TELKOM or to each other, that may or may not   result in TRANSACTION USE. Accordingly, TELKOM is entitled to access   and USE the SOFTWARE and to allow access to, and USE of, the   SOFTWARE for such purposes and within such functionality.   3. 10.   TELKOM and its AFFILIATES shall only allow USE of the SOFTWARE and SAP   PROPRIETARY INFORMATION by their respective employees, authorised   representatives and persons and entities authorised by TELKOM in terms of   formal arrangements and who are required as part of such arrangements to   assist TELKOM or an AFFILIATE, to USE or enhance the USE of TELKOM'S or   an AFFILIATE'S USE of the SOFTWARE.   3. 11.   Unless the parties should agree otherwise, TELKOM may make 1 (one) copy of   the SOFTWARE at the DESIGNATED SITE for archival purposes and such   number of backup copies of the SOFTWARE consistent with TELKOM'S normal   periodic backup procedures. Such copies must be held in a safe place for use



- 1 1 -                                             TELKOM CONTRACT No. 076C/01   only in the event of the SOFTWARE in regular use being rendered unusable or   inoperable. TELKOM shall notify SAP AFRICA should TELKOM need to USE   such backup or archival copy/ies.   3. 12.    The DOCUMENTATION and SAP AFRICA PROPRIETARY INFORMATION may   not be copied by TELKOM except for USE by TELKOM or AFFILIATE.   3. 13.    TELKOM shall not alter or erase SAP AFRICA's, SAP AG's and any of their   respective licensors' copyright, trademark, service marks, logos and other    proprietary notices on any complete or partial copies of the SOFTWARE,   DOCUMENTATION or SAP AFRICA's PROPRIETARY INFORMATION.   3. 14.     It is recorded that the SOFTWARE requires those THIRD-PARTY DATABASES   listed in annexure 1 which, unless the parties should agree otherwise, shall be   acquired and licensed by TELKOM directly from THIRD-PARTY DATABASE   licensors approved by SAP AFRICA, which approval shall not unreasonably be   withheld. SAP AFRICA confirms that the SOFTWARE shall perform and conform   to its functional specifications on all THIRD-PARTY DATABASES in respect of   which it has given its approval aforesaid. Accordingly, the licence granted in   terms of this AGREEMENT, shall be restricted to such extent if any, required to   implement those restrictions imposed on TELKOM directly by such THIRD-   PARTY DATABASE licensors. This AGREEMENT and the license granted in   terms hereof shall be suspended, if for any reason:   3. 14. 1.      TELKOM fails to obtain and/or maintain a licence from SAP AFRICA or       such THIRD PARTY DATABASE licensor; or   3. 14. 2.      TELKOM'S database licence/s terminates prior to the termination of this       AGREEMENT and is not replaced with a suitable alternative.



-12-  TELKOM CONTRACT No. 076C/01   3. 15.      It is recorded for the avoidance of doubt that, provided TELKOM is receiving and   paying for Maintenance Service as contemplated in clause 9, SAP AFRICA shall   provide Maintenance Services in accordance with the provisions of clause 9 and   annexure 2, in respect of the third party software that is licensed by SAP   AFRICA to TELKOM in terms of this AGREEMENT provided that SAP AFRICA   shall not provide such Maintenance Services in respect of any THIRD PARTY   DATABASE software that is not licensed in terms of this AGREEMENT.   4.    DELIVERY AND INSTALLATION   4. 1.     Delivery:   SAP AFRICA shall deliver 1 (one) copy of the SOFTWARE and the   DOCUMENTATION, in machine-readable format to TELKOM'S DESIGNATED   1SITE within 4 (four) weeks from the effective date (delivery). The   DOCUMENTATION shall be delivered in the language version requested by   TELKOM provided that such language version is commercially available.   4. 2.     Installation and Support Services:   4. 2. 1.     unless agreed otherwise in writing, TELKOM shall be responsible for   installation of the SOFTWARE. TELKOM shall be responsible for   configuring and installing any required disk storage systems, network   software, application servers, DESIGNATED UNITS and computer   terminals and workstations prior to installation of the SOFTWARE. It is   recorded that upon TELKOM's request and on terms to be agreed upon   separately, in writing, SAP AFRICA will provide installation services, pre-   installation support, installation support, configuration, training and   consulting services in respect of the SOFTWARE;



- 1 3 -  TELKOM CONTRACT NO. 076C/01   4. 2. 2      TELKOM shall test each module of the SOFTWARE extensively in its live   business environment to determine that it appears to be free of any major   defects and that it is suitable for TELKOM's application before TELKOM   USES the SOFTWARE within and for the benefit of its business.   4. 3.    TELKOM shall be entitled to utilise or operate the SOFTWARE on different   operating software for no additional licence fee or consideration but TELKOM   shall be liable for any installation, configuration or other costs incurred in   changing such operating software.   5.    LICENSE AND REVENUE SHARING FEES AND PAYMENT TERMS   5. 1.     Licence Fee: In consideration for the licence granted hereunder, TELKOM shall   pay to SAP AFRICA the licence fee as stipulated in annexure 1 (the Licence   Fee). The Licence Fee is priced in US dollars (USD). Forthwith after the   effective date, SAP AFRICA shall invoice TELKOM for payment of the License   Fee. SAP AFRICA shall convert the agreed License Fee, expressed in USD, into   ZAR using the USD: ZAR rate of exchange ruling at the close of business on the   day immediately preceding the date of invoice. For the purposes of this   AGREEMENT, the ruling rate shall be the buy rate for USD's offered by SAP   AFRICA'S bankers on that day. The Licence Fee expressed in ZAR as   aforesaid, shall be paid by TELKOM within 30 days of receipt by TELKOM of the   invoice.   5. 2.     In addition to the Licence Fee, TELKOM shall pay to SAP AFRICA an amount   equal to that percentage stipulated in 5. 3 (the REVENUE SHARE   PERCENTAGE), of TELKOM'S total gross revenue that TELKOM earns or   derives from commercial exploitation of the SOFTWARE licensed in terms hereof.



-14 -                                             TELKOM CONTRACT No. 076C/01   (the REVENUE SHARE FEE). For the purposes of calculating the REVENUE   SHARE FEE payable to SAP AFRICA,  the total gross revenue earned or   derived by TELKOM from the USE of the SOFTWARE:   5. 2. 1.       shall exclude:   5. 2. 1. 1.         VAT and other Government taxes raised on such revenue;   5. 2. 1. 2.         any credits, if any, that TELKOM may grant on a formal basis, to a       BUSINESS THIRD PARTIES;   5. 2. 1. 3.         royalties or fees that may be payable by TELKOM to a bona fide third       party who provides, in terms of formal arrangements with TELKOM,       additional functionality, enhancement or value add services to, or in       respect of, the SOFTWARE; any revenue earned or derived by       TELKOM pursuant to TELKOM providing goods and/or services in a       manner that does not USE the SOFTWARE; and   5. 2. 1. 4.         any other type of cost or charge that SAP AFRICA and TELKOM may       expressly agree shall be excluded;   5. 2. 2.              shall include the following amounts payable to TELKOM by BUSINESS          THIRD PARTIES for:   5. 2. 2. 1.         all charges and fees for accessing the Marketplace, any value add       services, any information, access to, or USE of, the SOFTWARE;   5. 2. 2. 2.         regular or once - off subscription fees for access to, or USE of, the       SOFTWARE, or the Marketplace or any information in respect       thereof;



-15- TELKOM CONTRACT No. 076C/01    5. 2. 2. 3.     value add services that SAP AFRICA and it's licensors may provide to   TELKOM and/or BUSINESS THIRD PARTIES USING, or in respect   of, the SOFTWARE and/or the Marketplace;   5. 2. 2. 4.      value added services that TELKOM may provide to BUSINESS   THIRD PARTIES USING or in respect of the SOFTWARE and/or the   Marketplace; and   5. 2. 2. 5.      any other fee or charge that TELKOM and SAP AFRICA may in the   future agree, should be included in the total gross revenue.   Where REVENUE SHARE is levied from a Net Market Maker connected to the   TELKOM Marketplace, then, the cumulative REVENUE SHARE shall not exceed   the REVENUE SHARE PERCENTAGE.   5. 3    For the period commencing from the effective date and ending February 2002,   the REVENUE SHARE PERCENTAGE shall be 10%. For the financial year   commencing 01 March 2002 and thereafter until agreed otherwise, the   REVENUE SHARE PERCENTAGE shall be 10% provided that should the   percentage of TELKOM'S direct and indirect procurement expenditure that is   transacted USING the SOFTWARE equal those percentage ranges stipulated   below, then, the REVENUE SHARE PERCENTAGE shall be decreased to the   corresponding percentage:       Percentage of TELKOM'S procurement USING SOFTWARE       Between 60% and 79%      80% or greater        9%        8%



- 1 6 -  TELKOM CONTRACT No. 076C/01   5. 4    The REVENUE SHARE FEE shall be payable quarterly in arrears 45 days after   the end of each quarter for the duration of this AGREEMENT.   5. 5    Should TELKOM fail to pay the REVENUE SHARE FEE, such failure shall not   effect TELKOM'S rights to USE the SOFTWARE but SAP AFRICA shall be entitled to   separately claim such payments from TELKOM as provided for hereinabove.   5. 6    TELKOM shall keep accurate records and accounts as are reasonably necessary   to verify TELKOM'S compliance with its' obligations in respect of the REVENUE   SHARE FEE. For the duration of this AGREEMENT, TELKOM shall within 3   months after expiry of its financial year - end furnish to SAP AFRICA a certificate   by TELKOM'S auditors, certifying the gross revenue earned by TELKOM or   derived by TELKOM as calculated in accordance with clause 5. 2. SAP AFRICA   shall repay to TELKOM or TELKOM shall pay to SAP AFRICA, as the case may   be, any overpayment or underpayment respectively.   5. 7    Referral Fees   TELKOM shall be entitled for the duration of this AGREEMENT, to market, at   prices and on terms and conditions determined by SAP AFRICA and its licensors   as being applicable to potential buyers. Should TELKOM be the effective cause   of the sale and licensing to any person or entity, of the following products, then   TELKOM shall be entitled to receive from the licensor of such product, a referral   fee equal to 10 % of the agreed license fee of each such product:   5. 7. 1      Net Market Maker;   5. 7. 2      Enterprise Buyer (Professional); and/or   5. 7. 3      Private Exchange.



-17-                                             TELKOM CONTRACT No. 076C/01   5. 8     TELKOM shall invoice and recover from the licensee of such products the   full license fee thereof and TELKOM shall pay to SAP Africa an amount   equal to such license fee less the aforesaid referral fee.   5. 9      The Revenue Share Fee and other related commercial terms of this   AGREEMENT shall be reviewed to market by the parties upon each   anniversary of this AGREEMENT in an endeavour to agree upon any   increases or decreases thereto. The parties acknowledge that the market   for the SOFTWARE in South Africa is limited and that therefor it may be   difficult to ascertain market conditions for the purposes of reviewing such   commercial terms. Accordingly, the parties shall take cognisance of market   conditions in other countries where the SOFTWARE is being used. Should   the parties be unable to agree upon any such amendments within 30 days   from the end of each year if any, then such dispute shall be referred for   determination by the Arbitration Foundation of Southern Africa (AFSA) in   accordance with the rules of AFSA and to an arbitrator appointed by the   Chairperson of AFSA upon application by either party. Except in the case   of manifest error, the arbitrators' ruling shall be final and binding upon the   parties but shall be without prejudice to a party's other rights and   obligations arising from the AGREEMENT.   6.    DURATION AND TERMINATION   6. 1.      Duration:   The licence granted hereunder shall become effective upon execution of this   AGREEMENT by both parties and shall endure indefinitely unless terminated   under clause 6. 2.



-18 -                                             TELKOM CONTRACT No. 076C/01   6. 2.     Termination:   This AGREEMENT and the licence granted hereunder shall terminate should any   of the following events occur:   6. 2. 1.        30 (thirty) days after TELKOM gives SAP AFRICA written notice of   TELKOM's wish to terminate this AGREEMENT for any reason. Any such   termination shall be subject to accrued rights and obligations but only after   payment of all Licence and Maintenance Fees then due and owing; or   6. 2. 2.           Subject to the provisions of this AGREEMENT, should either party (the          defaulting party) breach a material obligation arising from this          AGREEMENT and remain in breach, notwithstanding receipt of written          notice from the other party (the innocent party) affording the defaulting          party 20 days to remedy its breach, then the innocent party shall be entitled          to terminate this AGREEMENT alternatively, to claim specific performance          of the defaulting party's obligations without prejudice to the innocent party's          rights to claim damages for such breach.   6. 3.     No Refund:   Subject to, and without prejudice to, the provisions of clauses 6. 2. 2, 10 and 11,   should this AGREEMENT be terminated for whatever reason, then TELKOM   shall not be entitled to any refund of any of the Licence Fee payments or portions   thereof made by TELKOM other than Maintenance Fees that may have been   paid in advance.   6. 4.     Duties upon Termination:



- 19 -  TELKOM CONTRACT NO. 076C/01   Upon any termination hereunder, TELKOM and its AFFILIATES shall immediately   cease USE of the SOFTWARE, DOCUMENTATION, THIRD-PARTY DATABASE   and other SAP AFRICA PROPRIETARY INFORMATION and shall irretrievably   delete and remove such items from all DESIGNATED UNITS, application   servers, computer terminals, workstations, data files and DESIGNATED SITES.   Within 30 (thirty) days after any termination, TELKOM shall deliver to SAP   AFRICA, at the latter's expense, (adequately packaged and insured for safe   delivery) or, at SAP AFRICA'S request, destroy, all copies of SAP AFRICA's   PROPRIETARY INFORMATION in every form. TELKOM shall irretrievably erase   the SOFTWARE, and DOCUMENTATION, from any THIRD-PARTY DATABASE   and SAP AFRICA's PROPRIETARY INFORMATION from any storage media.   TELKOM agrees that an officer of TELKOM with the express authority to make   such a representation, shall certify in writing to SAP AFRICA that it and each of   its AFFILIATES has performed the foregoing. Within 3 months after any   termination, SAP AFRICA shall at its' cost return TELKOM'S PROPRIETARY   INFORMATION to TELKOM.   7.    PROPRIETARY RIGHTS   7. 1.    TELKOM acknowledges that ownership of and title in and to all intellectual   property rights, including patent, trademark, service mark, copyright and trade   secret rights in SAP'S AFRICA'S PROPRIETARY INFORMATION are and shall   remain vested in SAP AFRICA and SAP AG and their respective licensors.   TELKOM acquires only the right to USE the SOFTWARE, SAP AFRICA'S   PROPRIETARY INFORMATION under the terms and conditions of this   AGREEMENT and does not acquire any ownership, rights or title in or to the   SOFTWARE nor to SAP AFRICA'S PROPRIETARY INFORMATION.



- 20 -  TELKOM CONTRACT NO. 076C/01   7. 2.    TELKOM shall not itself, nor through any third party copy, translate, disassemble,   or decompile, nor create or attempt to create, by reverse engineering or   otherwise, the source code from the object code of the SOFTWARE licensed   hereunder or use it to create a derivative work.   7. 3.    TELKOM shall not remove any proprietary, copyright, trademark, or service mark   legend from the SOFTWARE, DOCUMENTATION or SAP AFRICA'S   PROPRIETARY INFORMATION.   7. 4.    TELKOM shall maintain a log of the number and location of all originals and   copies of the SOFTWARE. The inclusion of a copyright notice on any portion of   the SOFTWARE, DOCUMENTATION or SAP AFRICA'S PROPRIETARY   INFORMATION shall not cause, or be construed to cause, it to be a published   work.   7. 5.    Subject to the provisions of clause 8. 1 that expressly provide otherwise, all   modifications and extensions to the SOFTWARE and DOCUMENTATION shall   be considered part of the SOFTWARE and DOCUMENTATION for purposes of   this clause 7.   7. 6.    In order to protect the rights of SAP AFRICA and its licensors and TELKOM, in   and to their respective PROPRIETARY INFORMATION, SAP AFRICA and   TELKOM agree that neither party shall, without the other party's prior written   consent, disclose, provide, or make available any of the PROPRIETARY   INFORMATION of the other party in any form to any person, except to bona fide   employees, officers, directors, or consultants of such party whose access is   necessary to enable such party to exercise its rights hereunder. Each party   agrees that prior to disclosing any PROPRIETARY INFORMATION of the other   party to any such other person, it will obtain from such other person, a written



- 21 -  TELKOM CONTRACT NO. 076C/01   acknowledgement that he will be bound by the same terms as specified in this   clause 7 with respect to the either party's PROPRIETARY INFORMATION.   7. 7.     TELKOM and SAP AFRICA acknowledge that any disclosure to third parties of   PROPRIETARY INFORMATION may cause immediate and irreparable harm to   the owner of the disclosed PROPRIETARY INFORMATION. Accordingly, each   party agrees to take all reasonable steps and the same protective precautions   and measures to protect the other party's PROPRIETARY INFORMATION from   disclosure to third parties as it would take with its own proprietary and confidential   information.   8.    MODIFICATIONS AND EXTENSIONS:   8. 1.     TELKOM may make modifications and extensions to the SOFTWARE for use on   the DESIGNATED UNIT(S) under the terms set forth in this clause 8.   8. 2.     In the event that TELKOM develops any extension or modification (hereinafter   referred to as TELKOM extension or TELKOM modification) to the   SOFTWARE, TELKOM shall have all rights, title and interest in such TELKOM   extension or TELKOM modification subject to SAP AFRICA'S rights in the   SOFTWARE. TELKOM agrees, however, that such TELKOM extension or   TELKOM modification will be used solely in connection with TELKOM and its   AFFILIATES' business operations and that such TELKOM extension or TELKOM   modification will not be marketed, licensed or sublicensed, sold, assigned, or   otherwise transferred or made available to any third party or other entity, without   the express prior written consent of SAP AFRICA. TELKOM hereby grants SAP   AFRICA the right of first refusal to any licence to, or assignment of, such   TELKOM extension or TELKOM modification and TELKOM agrees not to dispose.



- 22 -  TELKOM CONTRACT NO. 076C/01   of or license, its rights thereto to any third party for a consideration not less than,   and upon other terms not less favourable than those initially offered to SAP   AFRICA.   8. 3.   In the event that SAP AFRICA develops jointly with TELKOM for universal   application and jointly funds with TELKOM, any extension or modification to the   licensed SOFTWARE, then save as may otherwise be agreed upon in writing by   SAP AFRICA and TELKOM, such extensions or modifications will be the joint   property of SAP AFRICA and TELKOM provided that   8. 3. 1.    Neither SAP AFRICA nor TELKOM will grant to any third party, either   expressly or impliedly, any rights, title, interest in, or licences to, such jointly   developed modification or extension. It is recorded that TELKOM shall be   entitled to USE such modification and extension on the DESIGNATED   UNIT(S) at the DESIGNATED SITE(S) in accordance with the provisions of   this AGREEMENT.   8. 3. 2.    8. 4.   The parties hereto agree that the granting of any rights, title or interest to   TELKOM in any extension or modification (including TELKOM extensions and   TELKOM modifications) shall not be construed by the parties hereto or any court   of law to mean that SAP AFRICA has granted or given up any rights, title, or   interest in or to SAP AFRICA'S PROPRIETARY INFORMATION or any part   thereof.   8. 5.   TELKOM agrees that it will not modify any third party SOFTWARE provided in   terms of this AGREEMENT, unless expressly authorised in writing by such third   party vendor and SAP AFRICA.



- 23 -  TELKOM CONTRACT No. 076C/01   8. 6.     During such time as SAP AFRICA provides maintenance service to TELKOM in   respect of the SOFTWARE, TELKOM shall not make modifications to the   SOFTWARE without the prior written consent of SAP AFRICA which shall not be   unreasonably withheld.   8. 7.     Notwithstanding anything to the contrary contained herein and without prejudice   to SAP AFRICA'S right of pre- emption provided for in clause 8. 2, should a party   (the acquiror) wish to acquire for itself only, the rights (and accompanying   obligations) in and to the jointly developed and funded MODIFICATION OR   EXTENSION, then the acquiror shall pay to the other party (the divesting party)   an amount equal to the market value of such modification or extension.   9.    MAINTENANCE   9. 1     SAP AFRICA shall provide maintenance services in respect of the SOFTWARE   in accordance with the provisions of this AGREEMENT and annexure 2 hereto   (Maintenance Service). Maintenance Service by SAP AFRICA shall, unless   expressly agreed otherwise in writing, be provided only to the DESIGNATED   SITE as specified in annexure 1. Maintenance Service includes the delivery of   RELEASES and VERSIONS, support via telephone, the correction of defects,   SAP AFRICA'S remote support on-line SOFTWARE services, and those other   services as set out in annexure 2. It is conditional upon TELKOM receiving   Maintenance Service that TELKOM must make all required remote support and   connections to the DESIGNATED UNIT, at its expense, as reasonably requested   by SAP AFRICA. It is recorded that, unless the parties should agree otherwise,   such remote access shall be by a dial - up facility only.   9. 2     The Maintenance Services to be provided by SAP AFRICA shall not include any   services other than those contemplated in clause 9. 1 and those set out in



- 24 -                                             TELKOM CONTRACT No. 076C/01   annexure 2. Maintenance Services will be offered only for the current VERSION   and RELEASE and the immediately preceding VERSION and RELEASE. SAP   AFRICA shall use its best endeavours to provide Maintenance Services in   respect of earlier VERSIONS and/or RELEASES provided that should SAP   AFRICA and its licensors incur material costs in supporting such prior   RELEASES and/or VERSIONS, then the parties shall negotiate with each other,   observing the principles of good faith, to agree upon additional maintenance fees   payable by TELKOM in respect of such prior RELEASES and/or VERSIONS.   9. 3    Upon TELKOM'S request and provided that TELKOM has paid the Maintenance   Fee due to SAP AFRICA, SAP AFRICA shall, deliver new RELEASES and   VERSIONS and related DOCUMENTATION to the DESIGNATED SITES at no *   extra cost to TELKOM. Maintenance Service does not include the delivery of any   SOFTWARE and DOCUMENTATION that SAP AFRICA offers as separate   products and/or which have not been licensed in terms of this AGREEMENT.   9. 4      All other maintenance, consulting or related services not referred to in this clause 9   and/or in annexure 2, shall be agreed upon separately in writing and shall be   subject to agreed additional charges.   Maintenance Fees and Payment   9. 5     As consideration for providing the maintenance services, TELKOM shall pay to   SAP AFRICA an annual fee, that shall be calculated as a percentage of the   agreed License Fee, expressed in USD, for the SOFTWARE as specified in   annexure 1 hereto. Such percentage is stipulated in the annexure 2 hereto   (the Maintenance Fee). TELKOM shall pay the Maintenance Fee annually in   advance, in ZAR, calculated at the ruling USD: ZAR rate of exchange on the



- 25 -  TELKOM CONTRACT No. 076C/01   date of invoice and otherwise in accordance with the other terms of payment   set out in this AGREEMENT and annexure 2.   9. 6    SAP AFRICA shall be entitled, upon 3 months written notice, to increase the   Maintenance Fee by increasing the percentage upon which the Maintenance   Fee is calculated or, on another basis provided that any increase to the   Maintenance Fee, caused by a combination of increases arising from:   9. 6. 1       inflation; and/or   9. 6. 2       the percentage at which the Maintenance Fee is calculated; and/or   9. 6. 3       USD/ZAR exchange rate movements,   shall not be greater than the annual increase in the South African   Consumer Price Index for all areas for the immediately preceding year (the   CPI), as published by the Central Statistics Agency of South Africa, or its   successors. However, should the Maintenance Fee not be increased by   the full extent of the CPI for any one year then, future increases to the   Maintenance Fee shall not exceed the difference between the actual   increases to the maintenance fee and the cumulative effect of the annual   increases in the CPI, for the immediately preceding thirty six consecutive   months period.   9. 7    The Maintenance Services may be terminated by TELKOM in writing at   any time upon 3 (three) months prior written notice. Subject to any   accrued rights and obligations, SAP AFRICA shall be entitled to   terminate the provision of Maintenance Services in respect of the   SOFTWARE or any modules thereof in the event of:



- 26 -                                             TELKOM CONTRACT No. 076C/01   9. 7. 1           an unremedied material breach of this AGREEMENT by TELKOM;   and/or   9. 7. 2             should SAP AFRICA, SAP AG or their respective licensors, cease, for   whatever reason, providing such Maintenance Services,   provided that in the latter case, SAP AFRICA and /or SAP AG shall procure   that COMMERCE ONE INC.. Inc. shall provide the Maintenance Service   and any related obligations of SAP Africa when providing Maintenance   Service in terms of this AGREEMENT including, its' obligations arising out   of annexure 3 Any Maintenance Fees paid in advance will be refunded to   TELKOM.   9. 8    Wherever in terms of this AGREEMENT, TELKOM is obliged or required   to provide remote access for whatever reason to SAP AFRICA, then   SAP AFRICA and its representatives, shall comply strictly with   TELKOMS internal policies, arrangements and procedures with regard   thereto.   9. 9    SAP AFRICA shall use its best endeavours to meet and comply with the   projected resolution times set out in annexure 2 hereto.   10.     WARRANTY   10. 1    SAP AFRICA warrants that the SOFTWARE will conform to the functional   specifications contained in the DOCUMENTATION on the date of installation of the   SOFTWARE and will perform, when in use without material alteration on the   DESIGNATED UNIT in accordance with the functional specifications set forth in   the DOCUMENTATION.



- 27 -                                             TELKOM CONTRACT NO. 076C/01   10. 2    SAP AFRICA'S warranty aforesaid is subject to TELKOM providing SAP AFRICA   necessary access, including remote access, to the SOFTWARE and, if necessary,   to the DESIGNATED UNIT and to TELKOM not being in breach of any material   term of this AGREEMENT.   10. 3    TELKOM must specifically identify to SAP AFRICA, the nature of the perceived   SOFTWARE defect and specifically describe the conditions under which the   perceived defect occurs. TELKOM shall provide SAP AFRICA with sufficient test   time and support on TELKOM'S DESIGNATED UNIT to duplicate the problem, to   verify that the defect is within or in respect of the SOFTWARE and to confirm that   the problem has been corrected, provided that SAP AFRICA shall do so in a   manner and at a time that does not, in the circumstances, unreasonably disrupt,   TELKOM'S day to day operations.   10. 4    Should any module or aspect of the SOFTWARE fail to conform to its' functional   specifications, then SAP AFRICA shall, in terms of its warranty set out in this   AGREEMENT, either correct the defect, or, at SAP AFRICA's option, replace the   defective SOFTWARE or any module thereof.   10. 5    When the USE of the SOFTWARE is significantly restricted by a reported defect   and TELKOM has complied with its obligations on reporting defects, then SAP   AFRICA shall commence work on correcting the defect in accordance with the time   periods stipulated in annexure 2, and to complete such correction as soon as   possible thereafter, subject in all cases to the provisions of this clause 10.   10. 6     SAP AFRICA, at its cost, shall deliver and install a correction of the defect in   machine-readable form. If, at TELKOM'S request, SAP AFRICA corrects a defect   of any VERSION or RELEASE that is not subject to maintenance service, then



- 28 -                                             TELKOM CONTRACT No. 076C/01   SAP AFRICA shall be entitled to charge TELKOM in respect thereof, at SAP   AFRICA'S standard or usual charges and rates.   10. 7    The warranty set forth in this clause 10 shall not apply:   10. 7. 1     if the SOFTWARE is not USED in accordance with the DOCUMENTATION;     or   10. 7. 2       to any EXTENSIONS or MODIFICATIONS not carried out by SAP AFRICA;     or   10. 7. 3       if the defect is caused by a MODIFICATION or EXTENSION not carried out     or approved by SAP AFRICA; or   10. 7. 4       if the SOFTWARE is not installed on a DESIGNATED UNIT; or   10. 7. 5       to the extent that the defect is caused to a material extent by TELKOM; or   10. 7. 6       if TELKOM does not provide access, including remote access to the   SOFTWARE as required under clause 10. 2; or   10. 7. 7       if the defect is caused by a malfunction in the THIRD PARTY DATABASE in   which event, SAP AFRICA will assist TELKOM to obtain appropriate redress   from the third party database supplier in accordance with SAP AFRICA'S and   its licensors' arrangements with the supplier.   10. 8   SAP AFRICA does not warrant that the SOFTWARE will operate uninterruptedly or   that it will be free from minor defects or errors, that do not materially affect the   performance of the SOFTWARE or that the applications contained in the   SOFTWARE are designed to meet all of TELKOM'S or its AFFILIATES' business   requirements.



- 29 -  TELKOM CONTRACT No. 076C/01   10. 9    The warranty set out in this clause 10, is given and accepted in lieu of all other   express or implied warranties in respect of the SOFTWARE. TELKOM   acknowledges and agrees that save as otherwise herein contained, no   guarantees, representations, warranties or undertakings of any nature have been   given to TELKOM by SAP AFRICA or any other person acting or purporting to act,   on behalf of SAP AFRICA, SAP AG or their respective licensors, and TELKOM   acknowledges that no representations or undertakings other than those contained   herein have been made to, or relied upon by TELKOM.   10. 10   Ownership of all data stored on, or by means of, the THIRD PARTY DATABASES   vest in TELKOM.   11    LIMITATION OF LIABILITY   11. 1   TELKOM'S sole and exclusive remedies for any breach of SAP AFRICA'S   warranties contained in clause 10 shall, at SAP AFRICA'S option, be either:   11. 1. 1       replacement of the SOFTWARE and/or performance of services in respect   thereof; or   11. 1. 2       return or credit of an appropriate portion of any payment made, or to be   made, by TELKOM with respect to the defective portion, or the whole of the   SOFTWARE or Maintenance Services, but excluding the License Fee or any   portion thereof.   SAP AFRICA must exercise its option within 20 days of first becoming aware of the   defect.   11. 2   TELKOM'S remedies for other loss or damages shall be as set out in clauses   11. 34 and 11. 5 below.



- 30 -                                             TELKOM CONTRACT No. 076C/01   11. 3   For the avoidance of doubt, it is recorded that SAP AFRICA will not be liable under   this AGREEMENT for:   11. 3. 1       the MODIFICATION or improvement of the SOFTWARE by TELKOM to fit   the particular requirements of TELKOM; or   11. 3. 2       the correction of any data errors resulting from MODIFICATIONS or   EXTENSIONS by TELKOM or its agents; or   11. 3. 3       the correction of any data errors as a result of misuse of the SOFTWARE by   TELKOM or its agents; or   11. 3. 4       preparation or conversion of data by TELKOM into the form required for use   with the SOFTWARE.   11. 4   Subject to, and without prejudice to the provisions of this clause 11. 1 and clause   10, SAP AFRICA'S liability for any loss or damages of whatever nature or however   arising, that may be suffered by TELKOM or AFFILIATE from USE or license of the   SOFTWARE and irrespective of the number of occurrences giving rise to such   liability, shall be limited to the aggregate of all License Fees paid by TELKOM to   SAP AFRICA in terms of this AGREEMENT, up until the date when such damages   are determined or agreed.   11. 5     Notwithstanding anything to the contrary contained in this AGREEMENT, a party   hereto (the defaulting party) shall not be liable for any consequential damage or   loss of whatever nature and/or however caused, that may be suffered by the other   party (the innocent party) other than for consequential loss or damages suffered   by the innocent party caused by the wilful or intentional acts or omissions of the



- 31 -  TELKOM CONTRACT No. 076C/01   defaulting party or any person or entity in respect of whom the defaulting party may   be vicariously liable. However, it is recorded for the avoidance of doubt that if   TELKOM should suffer a loss of revenue as a consequence of the SOFTWARE   failing to conform or perform to its functional specifications, then SAP AFRICA's   revenue share fee shall be decreased accordingly.   11. 6   It is agreed that each provision of this AGREEMENT that provides for a limitation   of liability, or warranties or exclusion of damages, is intended by the parties to be   severable and independent of any other provision and to be enforced as such.   11. 7     FAILURE OF MARKETPLACE   11. 7. 1      Notwithstanding anything to the contrary contained in this AGREEMENT and in   particular, clause 11. 1, in instances where the module of the SOFTWARE   constituting a portion of the Marketplace known as MarketSet 2. 0 Platform, fails   and cannot be accessed or USED by TELKOM and BUSINESS THIRD PARTIES   on the DESIGNATED UNIT and/or such other DESIGNATED UNIT where the   SOFTWARE is installed for disaster recovery or back-up USE, and such failure is   caused solely by a failure in the SOFTWARE to perform in accordance with the   specifications set out in the DOCUMENTATION and should the Marketplace   remain unable to be accessed or USED by TELKOM and/or BUSINESS THIRD   PARTIES for a continuous period of 72 hours, commencing from the time when   such failure is logged as a Priority 1 error (as defined in annexure 2) with SAP   AFRICA as a SOFTWARE problem and SAP AFRICA is unable to provide a   solution or resolution within the said 72 hours, then TELKOM shall be entitled to   terminate this AGREEMENT and claim damages limited as provided for in clause   11. 4.



- 32 -  TELKOM CONTRACT No. 076C/01   11. 7. 2       The remedy granted to TELKOM in terms of clause 11. 7. 1 shall only be available   until statistics with regard to the stability of the Marketset 2. 0 Platform has   reached a level that is acceptable to Telkom. Such acceptance shall be based on   market norms for the availability levels of Marketset software similar to or the   same as Marketset considered to be mission critical, which can be established via   independent market research, which shall be the responsibility and for the   account of SAP. In the event of a dispute between the parties then clause 22 shall   apply.   12     INDEMNITY   12. 1   SAP AFRICA warrants that SAP AG and its licensors own the SOFTWARE and   CONFIDENTIAL INFORMATION licensed by SAP AFRICA hereunder, including   all intellectual property rights therein and that SAP AFRICA has all rights from SAP   AG and its licensors necessary to licence the SOFTWARE and SAP AFRICA'S   CONFIDENTIAL INFORMATION to TELKOM in accordance with the terms of this   AGREEMENT,   12. 2   SAP AFRICA makes no representations with regard to the possibility of   infringement by combination use of the SOFTWARE. The parties agree that SAP   AFRICA has no duty to investigate any such possibility. As used herein,   combination use means use of the SOFTWARE in combination or conjunction   with any of the following (unless such use is prescribed in the   DOCUMENTATION):   12. 2. 1       any software other than the SOFTWARE (including TELKOM EXTENSION   or TELKOM MODIFICATION) MODIFICATION) unless such EXTENSION or   MODIFICATION has been incorporated, wholly or partially, in the   SOFTWARE; or



- 33 -  TELKOM CONTRACT No. 076C/01   12. 2. 2       any apparatus other than a DESIGNATED UNIT; or   12. 2. 3        any activities of TELKOM or its authorised AFFILIATES not licensed under   this AGREEMENT.   12. 3    Subject to clause 11. 2, SAP AFRICA shall indemnify TELKOM against all claims,   liabilities, and costs, including reasonable attorneys fees, reasonably incurred in   the defence of any claim brought against TELKOM in the TERRITORY by a third   party alleging that TELKOM'S USE of the SOFTWARE and DOCUMENTATION    infringes a third party's copyright, patent, PROPRIETARY INFORMATION and/or   trade secrets; provided that TELKOM promptly notifies SAP AFRICA in writing of   any such claim and SAP AFRICA is permitted to control fully the defence and any   settlement of such claim at SAP AFRICA'S own expense. TELKOM shall co-   operate fully in the defence of such claim and any reasonable costs incurred by   TELKOM in giving such co-operation shall be reimbursed by SAP AFRICA. SAP   AFRICA may, in its sole discretion, settle any such claim on a basis whereby SAP   AFRICA, substitutes the SOFTWARE and DOCUMENTATION (in consultation   with TELKOM) with alternative, substantially equivalent, non-infringing programs    and support DOCUMENTATION, which TELKOM shall be obliged to accept.   12. 4    SAP AFRICA, SAP AG and their licensors, shall not be liable for any claims,   liabilities and costs, including attorneys fees, reasonably incurred in the defence   of any claim (other than for the infringement of intellectual property rights   specified in clause 10. 3 above), arising out of TELKOM'S unauthorised use of the   SOFTWARE, DOCUMENTATION, THIRD-PARTY DATABASE and SAP   AFRICA PROPRIETARY INFORMATION, licensed under this AGREEMENT   provided that SAP AFRICA promptly notifies TELKOM in writing of such claim   and that TELKOM is permitted to control fully the defence and any settlement of   such claim.



- 34 -  TELKOM CONTRACT NO. 076C/01   12. 5   SAP AFRICA shall be entitled, in its sole discretion, to take such actions against a   third party that it determines are necessary or desirable in connection with any   infringement or alleged infringement by a third party of the SOFTWARE and any   module thereof or the DOCUMENTATION.   12. 6   Save as is set out in clause 11 and this clause 12, TELKOM shall have no other   claim or remedy arising from the alleged infringement of third party intellectual   property rights, against SAP AFRICA, SAP AG and their licensors.   13     ASSIGNMENT   13. 1   Neither Party shall be entitled to cede, or delegate its rights and obligations arising   from this AGREEMENT or to assign this AGREEMENT to any other person or   entity without the prior written consent of the other party provided that either party   shall be entitled to assign this AGREEMENT, in whole and not part only, to any of   its' subsidiary or holding companies (as defined and contemplated in the   Companies Act of 1973, as amended) provided that any such assignment shall   ipso facto cease to be of any further force and effect as between the parties,   should the assignee cease, for whatever reason, to be a subsidiary or holding   company, of the assignor.   13. 2   TELKOM recognises and agrees that the source code and all parts thereof, is the   valuable proprietary and confidential information and trade secrets of SAP   AFRICA, SAP AG and its licensors, and shall remain so even after a release of the   source code to TELKOM under the Escrow agreement the provisions of which are   set out in annexure 3. In the event of a release of the source code to TELKOM   under the Escrow agreement, TELKOM agrees to hold same in strict confidence   and to take appropriate action to preserve its confidentiality, and TELKOM shall



- 35 -  TELKOM CONTRACT No. 076C/01   have a non-exclusive, non-transferable LICENCE to use the source code solely for   its own USE in order to support and maintain the SOFTWARE and for no other   purpose whatsoever. TELKOM shall use the source code only at its own premises   on its own data processing equipment or third parties in accordance with the   license granted in terms of clause 3 and the provisions of this AGREEMENT.   TELKOM shall not copy the source code, nor disclose it to any third party except   agents retained by TELKOM to assist in maintaining the SOFTWARE, provided   that no such agent is in the business of marketing or developing SOFTWARE   competitive with the SOFTWARE.   14     GENERAL PROVISIONS   14. 1   AGREEMENT Binding - This AGREEMENT shall be binding upon and accrue for   the benefit of the parties hereto and their respective successors and permitted   assigns.   14. 2   Entire AGREEMENT - This AGREEMENT and each annexure hereto constitute   the complete and exclusive statement of the AGREEMENT between SAP AFRICA   and TELKOM as to its subject matter and all previous representations, discussions   and writings are superseded by this AGREEMENT. No variation of, or addition to,   this AGREEMENT shall be of any force or effect unless reduced to writing and   signed by both parties.   14. 3   Severability - It is the intent of the parties that in case any one or more of the   provisions contained in this AGREEMENT shall be held to be invalid or   unenforceable in any respect, such invalidity or unenforceability shall not affect the   other provisions of this AGREEMENT and this AGREEMENT shall be construed   as if such invalid or unenforceable provisions had not been contained herein.



- 36 -  TELKOM CONTRACT No. 076C/01   14. 4   No Waiver - If either party should waive any breach of any provisions of this   AGREEMENT, it shall not thereby be deemed to have waived any preceding or   succeeding breach of the same or any other provision hereof.   14. 5   Publicity -Neither party shall use the name of the other in publicity, advertising, or   similar activity, without the specific prior written consent of the other as to the   content, appearance, layout and other features thereof, provided that TELKOM   may use the marks SAP, and COMMERCE ONE INC and the phrase Powered   by Market Set in its websites that employ or utilise the SOFTWARE provided SAP   AFRICA and/or COMMERCE ONE INC.. Inc. have given its/their prior consent to   the format and typeface thereof which consent shall not be unreasonably withheld.   14. 6   Governing Law -This AGREEMENT shall be governed by and construed under the   Laws of the Republic of South Africa.   1 5.     DOMICILIA AND NOTICES   15. 1    Any notices to be given to the parties in terms of this AGREEMENT shall be in   writing and delivered by hand during ordinary business hours or posted by prepaid   registered post or transmitted by fax during normal business hours to the   addresses mentioned hereunder, which respective addresses the parties choose   as their domicilia citandi et executandi for the delivery or service of all notices,   communications or legal processes arising out of this AGREEMENT:   SAP  AFRICA :  SAP Business Park   1 Woodmead Drive   Woodmead, Sandton   Attention Managing Director



- 37 -  TELKOM CONTRACT NO. 076C/01   Fax: (011)235 6002   TELKOM                             The Managing Executive   Procurement Services   P 0 Box 447   Pretoria, 0001   19  th Floor, Telkom Towers North   152 Proes Street, Pretoria   Fax: (012)311 6210/Tel: (012)311 6047   or such other address in the Republic of South Africa as either party may choose   by written notice to the other from time to time.   15. 2   Every notice shall be deemed to have been properly given, in the absence of proof   to the contrary:   15. 2. 1       if delivered by hand, on the date of delivery;   15. 2. 2       If sent by prepaid registered post, 14 (fourteen) days after the date on which   the notice is posted;   15. 2. 3       If sent to a party at its telefax number, on the date of transmission where it is   transmitted during normal business hours of the receiving instrument, and on   the next business day where it is transmitted outside those business hours,   in either event provided that it has been confirmed by registered letter posted   no later than the business day immediately following the date of   transmission.



- 38 -                                             TELKOM CONTRACT No. 076C/01   15. 2. 4       Notwithstanding anything to the contrary herein contained, a written notice or   communication actually received by either party from the other, shall be an   adequate written notice as communication to such receiving party   notwithstanding that it was not sent to or delivered at that party's chosen   domicilium citandi et executandi.   16.     FRAUD   16. 1    If, at any time during the currency of this Agreement, TELKOM in its reasonable   discretion based on prima facie evidence determines that SAP AFRICA has, in   respect of this Agreement or any other contract or agreement to which they were   or are Parties:   16. 2. 1       acted dishonestly and/or in bad faith, and/or   16. 2. 2       has made any intentional or negligent misrepresentation to TELKOM   whether in any negotiations preceding the conclusion of, or in the execution   of this or any other agreement between the Parties,   then TELKOM will be entitled by written notice to SAP Africa forthwith to cancel   this Agreement. Upon such cancellation TELKOM will be entitled in addition to all   other remedies available to it, to recover from SAP Africa all damages it has   suffered by virtue of such conduct by SAP Africa. If, at the time of such   cancellation, TELKOM is indebted to SAP Africa for any amounts whatsoever,   TELKOM will be entitled to withhold payment in respect thereof for a period of 90   (ninety) days from the date of cancellation in order to investigate SAP Africa's   conduct and any damages suffered by TELKOM. No payment by TELKOM to SAP   Africa after the lapse of such period will preclude TELKOM thereafter, from   recovering from SAP Africa any such damages as it may have suffered.



- 39 -  TELKOM CONTRACT No. 076C/01   17.     FORCE MAJEURE   17. 1   If circumstances which were not foreseeable with reasonable foresight or   avoidable with reasonable care (circumstances) arise, or be reasonably   anticipated and delayed or have potential to delay the performance, whether in   whole or in part impossible then, the party whose performance is affected, or   whose performance may be affected (affected party), will forthwith, in good faith   and by the most expeditious means, notify the other party in writing of:   17. 2. 1         the cause, nature and extent of the circumstances;   17. 2. 2         the expected duration of the circumstances;   17. 2. 3         the extent to, which the performance will be affected.   17. 3     If the circumstances change after the affected party has notified the other party in   accordance with clauses stated above, the affected party will, forthwith, in good   faith and by the most expeditious means, inform the other party of such changes   and keep the other party undated on such changes.   17. 4   Subject to the Agreement clauses stated above, the circumstances will not   terminate the Agreement between the parties, or absolve the affected party from   performance.   17. 4. 1      If the circumstances make the agreed performance impossible, the affected   party will, having regard to all relevant factors, as soon as possible and in   good faith, put proposals for alternatives to the other party. Such proposals   will be in sufficient details to enable the other party to technically and



- 40 -                                             TELKOM CONTRACT No. 076C/01   informatively assess the alternatives and to decide whether any alternative   is acceptable.   17. 4. 2      If there is no alternative acceptable to the other party, it may elect to   terminate the AGREEMENT with immediate effect and without prejudice to   any other rights it may have, subject to payment of any amounts due and   payable.   17. 5     If the circumstances delay the agreed performance-   17. 5. 1      the affected party will, forthwith and in good faith, take all reasonable steps   to mitigate delay and recover lost time, and   17. 5. 2       having regard to all relevant factors and in good faith, notify the other party   as soon as possible of the steps to be taken to mitigate the delay and   recover lost time and keep the other party updated on changes and   progress thereof.   17. 5. 3       the other party may, if the extent to which the delay may be mitigated and   time lost be recovered are unacceptable to it, elect to terminate the   AGREEMENT.   17. 5. 4       neither of the parties will have any claim, arising from the circumstances,   on the other, provided any amounts due and payable, are paid in full.   17. 6     Without limiting the generality and intention of the clauses above in any way, the   circumstances may include, without being limited thereto:   17. 6. 1         War, riots, civil or military insurrection and like political happenings.   17. 6. 2         Natural disasters such as earthquakes, fire, storms and floods.



- 41 -                                             TELKOM CONTRACT No. 076C/01   17. 6. 3         Governmental acts and omissions.   17. 6. 4         Terrorism and sabotage.   17. 7     Any delay or non performance of any provision of the AGREEMENT (other than for   payment of amounts due hereunder) caused by conditions beyond the control of   the performing party will not constitute a breach of the AGREEMENT and the time   for performance of such provision, if any, will be deemed to be extended for a   period equal to the duration of the conditions preventing performances.   18.     SAFETY AND SECURITY   18. 1   SAP Africa agrees to comply with TELKOM'S security and safety procedures.   Without limiting the generality thereof, SAP Africa will specifically comply with the   Occupational Health and Safety Act. This AGREEMENT will constitute compliance   with section 37(2) of said act and SAP Africa will ensure that all necessary steps   are taken to comply the said Act.   19.     CANVASSING, GIFTS, INDUCEMENTS AND REWARDS   19. 1   SAP Africa will not under any circumstances offer promise or make any gift,   payment, loan, reward, inducement, benefit or other advantage to any of   TELKOM'S employees.   19. 2   Such an act is a material breach of the AGREEMENT and will be dealt with   accordingly.   20.     MODIFICATION OF AGREEMENT



- 42 -                                             TELKOM CONTRACT No. 076C/01   20. 1    If it becomes necessary during the AGREEMENT period to amend this   AGREEMENT or to delete any of the existing provisions contained in this   AGREEMENT, then such amendments will be done after consultation and mutual   agreement between SAP AFRICA and TELKOM and confirmed in writing and   signed by the parties to this AGREEMENT.   21.       MARKETING PLANS   As soon as possible after signature of this AGREEMENT, representatives of the   parties shall meet and commence discussions and negotiations on the   establishment, compilation and content of a marketing and branding plan in   respect of the SOFTWARE and the services offered and to be offered by   TELKOM, USING the SOFTWARE. During such negotiations, the parties shall   observe the principles of utmost good faith to each other and they shall use their   best endeavours to reach agreement on the sharing of responsibilities and tasks,   the financial and other contributions due from each party and such other   appropriate terms and conditions. Failure by the parties to reach any such   agreement, shall not entitle either party to terminate this AGREEMENT.   22.     ARBITRATION   22. 1. 1      Should any dispute of whatever nature arise between the parties, then any and all   disputes shall be submitted to and decided by arbitration. Any such arbitration   (the arbitration) will be governed by the provisions of this clause 22.   22. 2   Subject to the other provisions of this agreement specifically providing for the   resolution of any dispute, where any dispute, disagreement, or claim arises   between the parties (called here after the dispute) concerning this agreement, the   parties shall try to resolve the dispute by negotiation. This entails that the one party



- 43 -  TELKOM CONTRACT NO. 076C/01   invites the other in writing (providing details of the dispute) to meet and to attempt   to resolve the dispute within 7 (seven) days from the date of the written invitation.   Should the dispute not be resolved in this manner, the dispute will go to arbitration.   22. 3   The arbitration shall be held informally in Johannesburg or such other place agreed   upon by the parties and in accordance with the rules of the Arbitration Foundation of   Southern Africa, it being the intention of the parties that, as far as possible, the   arbitration shall be concluded within 21 days after it has been demanded.   22. 3   The arbitrator shall be a person agreed upon by the parties or, failing such   agreement, by the chairperson of AFSA. The arbitrator shall be empowered to   appoint such assistants as he deems fit in the event of the subject matter of the   dispute requiring expertise in any particular field for its proper resolution.   22. 4   Unless the parties otherwise agree, the arbitrator's award shall be in writing, and shall   be final and binding upon the parties and at the notice of either party, be capable of   being made an order of a competent court.   22. 5   No provision in this arbitration clause shall be taken as prohibiting the rights of either   party to approach the appropriate court for the purposes of any interim or interdictory   relief.   23     INSURANCE   23. 1   Without limiting SAP AFRICA'S liabilities or responsibilities in terms of the   AGREEMENT, SAP AFRICA will provide and maintain insurance to cover its   liability and responsibilities in terms of this AGREEMENT.   23. 2   Notwithstanding anything elsewhere contained in the AGREEMENT, SAP AFRICA   will provide at least:   23. 3   Insurance in terms of the Compensation for Injuries and Diseases Act, No. 130 of   1993, as amended. SAP AFRICA will upon request from TELKOM submit proof   to the satisfaction of TELKOM that it is insured under the Compensation for



- 44 -  TELKOM CONTRACT NO. 076C/01   Injuries and Diseases Act by providing TELKOM with adequate proof stating that   it has paid all assessments due;   23. 4   Legal liability in respect of claims for death and/or injury to persons or loss of/or   damage to third party property;   23. 5   Motor Vehicle Liability Insurance in respect of all motor vehicles brought onto the   premises of TELKOM.   24     CONFIDENTIALITY   24. 1   For the purposes of this clause, any person giving information shall be   referred to as the discloser and any person receiving information shall   be referred to as the recipient.   24. 2   All information of a confidential nature (including, but not limited to, all   information relating to the software), disclosed or made available by one   party to the other in connection with this agreement, whether furnished   verbally or in writing or in computer language, and whether marked   with proprietary legend or not, shall constitute confidential, proprietary   and trade secret information (collectively referred to as the   information) of the disclosure, provided that there shall be excluded   from such information any information which is at the time of disclosure   already in the public domain otherwise than by breach of this agreement   and there shall furthermore be excluded such information as the   recipient is able to show was within its knowledge prior to the   disclosure thereof.



- 45 -  TELKOM CONTRACT NO. 076C/01   24. 3   The recipient shall at all times, including such times after this   agreement has been terminated, unless otherwise agreed in writing by   the discloser, hold the information furnished by the discloser in strict   confidence and shall use such information solely for the purposes of   this agreement. The recipient shall disclose such information only to its   own employees and professional advisers as are necessary for the   purposes of carrying out its obligations and duties in terms of this   agreement, provided that prior to such disclosure such employees and   professional advisers have been advised in writing by the recipient of   the confidential nature of the information. The same shall be true of   customers. The recipient shall make no other use or disclosure of any   nature of the information. For the purposes of this clause 25, the   phrase personnel shall be deemed to include directors, sub-   contractors or other representatives of the recipient.   24. 4    The recipient shall at all times, unless otherwise agreed in writing by   the discloser:   24. 4. 1      hold the information and the reports furnished by the discloser in the   strictest confidence;   24. 4. 2      shall use such information and reports solely in connection with the   recipient's internal evaluation of the possibilities, the advancement and   implementation of the business association contemplated in this   agreement.



- 46 -                     TELKOM CONTRACT No. 076C/01   24. 5   24. 6   The recipient shall disclose such information and the reports only to its   own employees and professional advisers as are necessary on a strictly   need to know basis.   The recipient and its employees shall not copy, reverse, engineer,   exchange or reproduce the information and/or the reports, in whole or in   part, by any method whatsoever.    THUS DONE AND SIGNED at  Pretoria  on this 31st day of  March 2001     For and on behalf of SYSTEMS APPLICATIONS (AFRICA)(Proprietary)limited     /S/                                                                              /S/                                                                                    (who warrants his authority to so sign)   For:  TELKOM  SOUTH AFRICA LIMITED             (who warrants his authority to so sign)   /s/                                      (who warrants his authority to so sign)                          THUS DONE AND SIGNED at  Pretoria  on this 31st day of  March 2001   For and on behalf of TELKOM SOUTH AFRICA LIMITED   in the presence of the undersigned witnesses   AS WITNESSES     Signature         /S/    Print name:      name illegible   Signature         /S/    Print name:      M.L.MORKEL



- 47 -   TELKOM CONTRACT No. 076C/01



- 48 -    TELKOM CONTRACT NO. 076C/01   ANNEXURE 1   To   AGREEMENT   between   SYSTEMS APPLICATION PRODUCTS (AFRICA) (PTY) LIMITED   with   TELKOM SOUTH AFRICA LIMITED   Designated Site/Location:                       91 OAK AVENUE, CENTURION   Affiliate Name (if different from Licensee):         Delivery Address:   Contact Person:    B L A I RE       A B SH I RE     Tel.  No     012-677-3518   Designated Unit to be identified by Licensee to SAP AFRICA in writing.   Hardware Manufacturer:      Type/Model:    Operating System: ____________________________   CENTURION DATA CENTRE      91 OAK AVENUE, CENTURION



- 49 -     TELKOM CONTRACT NO. 076C/01   Database Manager: Licence Number:   1.        This Annexure 1 is annexed to and incorporated into the Agreement. Should any provision of this Annexure conflict with the provisions of the Agreement, then the provisions of this Annexure shall prevail.   The Licence fee for the Software licensed in terms hereof is US$5, 000, 000, 00. The License Fee shall be converted into ZAR and TELKOM shall be invoiced on the day following signature of this AGREEMENT at the ruling USD/ZAR exchange rate being the average between buy and sell usd offered by SAP Africa's bankers at the close of business on the date of signature of this AGREEMENT. The License Fee expressed in ZAR plus VAT thereon shall be payable by TELKOM within 7 days of the date of invoice. Should TELKOM fail to pay the License Fee on due date then, TELKOM shall pay interest on such amounts due but outstanding at the legal rate of interest and any negative variation in the USD/ZAR exchange rate from due date of payment until receipt of payment shall be for TELKOM'S account. If this AGREEMENT is not signed by Telkom on or before 31 st  March 2001, then the license fee shall be determined in accordance with the SAP Africa/COMMERCE ONE INC.. standard pricing policies.   3.         The revenue share that TELKOM shall pay to SAP AFRICA shall be 10%.   4.          The Software licensed in terms of this agreement comprises the following modules and    components:   A. Platform   15. 1. 1.                         Product Description   The MarketSet 2. 0 Platform provides the infrastructure on which the MarketSet E- Marketplace is created and deployed. The MarketSet 2. 0 Platform provides the necessary tools and components to support the exchange of XML-based business documents (xCBL) between trading partners, and enables business services to interact with those business documents. More specifically, the MarketSet 2. 0 platform provides the messaging, routing, addressing, transaction, security, connectivity, and high availability components and services, necessary to create and deploy world class business-to-business e-marketplaces. The MarketSet 2. 0 platform shares a common feature/functionality set with COMMERCE ONE INC.. 's MarketSite 4. 0 and Net Market Maker 2. 0 e-Marketplace solutions.



- 50 -     TELKOM CONTRACT NO. 076C/01   16. B. Market Set Builder   16. 1. 1. Product Description   MarketSet Builder is an essential element of the MarketSet E-MarketpIace infrastructure. It enables communities to develop and flourish within a marketplace. It enables the marketplace operator to create their own branded marketplace, register and manage users of their marketplace and target content and services to those users. In addition, it plays a critical role in the integration of business services to the marketplace   1 7. C. Business Services Framework   17. 1. 1. Product Description   The Business Service Framework, or BSF, is a set of services, interfaces, tools, methodologies, and documentation that provides, as a whole, a comprehensive means for connecting new services into the Global Trading Web.   Add-In Services   The open and flexible Market Set Business Services Framework enables e- marketplaces to leverage their domain expertise and provide additional services and greater value for their users. An e-marketplace can incorporate third-party services specific to an industry, as well as cross-industry services such as shipping, taxation, and credit reports.   18. Core Market Set Services   19. A. Procurement Services   19. 1. Product Description   Enterprise Buyer Professional Edition has been optimized for SAP customers looking for an e-procurement application that can automate the entire purchasing process, including MRO as well as direct goods purchases. When this application suite is run hosted at a MarketSet, this is referred to as Procurement Services. Professional has deep integration natively to the other supply chain components that make up the MarketSet solution.



- 51 -     TELKOM CONTRACT NO. 076C/01   20. B. Content Services   20. 1. Product Description   Content Services offers a comprehensive set of offerings to handle all of the content needs of Market Set e-marketplaces and deliver value-added content to their trading communities.. Market Set's content and catalogue offering includes the following components and services:   21. Content Engine   21. 1. Product Description   Content Engine addresses all the critical needs of an e-marketplace operator to create, operate, and maintain a commerce-ready Catalog. Content Engine combines unique data aggregation capabilities with an easy to use, powerful search engine that enables marketplace operators to offer a multi-supplier catalog that could potentially contain products and information from thousands of suppliers. Content Engine also allows marketplace operators to link 3rd party data (ratings, data sheets, regulations information) or self created content to product information to provide a unique value added search experience for their community.   22. C. Order Management Services   22. 1. Product Description   MarketSet Order Management Services is a web-based application offered as a hosted service that enables sellers to simply manage orders and publish content through a Web browser. MarketSet Order Management Services allows suppliers to transact with buyers using only a browser and access to the Internet.   MarketSet Order Management Services is a critical piece of the solution that allows the participation of small or specialized sellers. With MarketSet Order Management Services, the buying customer can access unique products from a full range of sellers, regardless of their technical infrastructures.   MarketSet Order Management Services provides an efficient and easy-to-administer solution to enable sellers and automate the transaction process. At the same time, a MarketSet market maker is able to administer and monitor transaction related activities to ensure high service quality for their e-marketplace.



- 52 -    TELKOM CONTRACT NO. 076C/01   23. D. Auction Services   23. 1. 1. Product Description   Market Set Auction Services offers real-time bidding solutions for corporate buyers and sellers, enabling them to quickly and cost-effectively implement B2B Internet bidding events to enhance existing procurement or liquidation processes. Market Set Auction Services supplies businesses with a fully hosted solution and provides users with administrative capabilities to control the data and the bidding process. It enables businesses to conduct online dynamic exchanges of products and services with their suppliers, their channel partners and their customers   24. E. Analysis Services   24. 1.                 Product Description   The Reporting Solution in MarketSet 2. 0 includes capturing and retaining information about the data that passes through Enterprise Buyer Professional Edition on the e- marketplace and providing that data to Business Information Warehouse 1for analysis. Standard report templates are available out of Business Information Warehouse as well as the ability to create custom reports. Users can also use the build in online analytical processing (OLAP) engine for further evaluations and analyses. Currently, Enterprise Buyer Professional Edition is the only service providing data to Business Information Warehouse, but other services will provide data in future releases.   1 Branding name may change.



- 53 -    TELKOM CONTRACT No. 076C/01   2 4 .   2 .       S o f t w a r e   The following software is provided in the MarketSet 2. 0 Solution package:    Market Site Platform 4. 0    Market Site Admin Console 4. 0    Market Site Builder 4. 0    Order Management Services x. x    Supply Order 3. 0    SDK Pro 4. 0    BCC 4. 0    CPC 3. 2. 1 NT (128 Bit)    Business Connector 3. 1. 1    Document Mapping Service 1. 1    Procurement Service (Enterprise Buyer Professional Edition)    Content Engine 2. 0 with Service Pack 2    Planning Services 3. 0a (URL Link Only)    Design Services     Business Analysis 2. 0B    ITS 3. 0    Auction Services 4. 0    Market Set 1. 0 Additional Components CD    Business Connector 3. 1 (Developer Edition)    Round Trip Broker 1. 1    Bulletin Board 1. 0    User Management Mapping Service 1. 0    Installation for Market Set 1. 0 (PDF)   24. 3. 3rd Party Proprietary Software also Licensed in terms of this Agreement



- 54 -     TELKOM CONTRACT No. 076C/01   The following 3rd party proprietary software is provided as a part of the MarketSet E- Marketplace Solution    SonicMQ Message Broker    Netscape's iPlanet Directory Server 4. 11    Extensibility's XML Authority 1. 1 d    Allaire's JRun Pro 2. 3. 3    InetSoft's Style Report 2. 1    Cygnus'GNU Tools B20. 1 Release    Sun's Java Naming and Directory Interface 1. 2    Sun's Java Server Development Kit 2. 0    Sun's JavaMail. 1. 2    Sun's JavaBeans Activation Framework 1. 0. 1 Release    Sun's Java Runtime Environment Version 1. 2. 2    Sun's Java Foundation Classes (JFC) / Swing JFC 1. 1 with Swing 1. 1. 1    lAIK's Java toolkit for Cryptography Extension 2. 51    lAIK's iSaSiLk Java toolkit SSL 2. 51    RSA's BSafe Crypto-J    James Clark's XT XSL Processing Library Version 19991105    ANTLR. ORG's ANTLR 2. 5. 0    SAX's SAX 1. 0 and 2. 0     W3C's Jigsaw 2. 0. 3    Microsoft Virtual Machine Build 3229    Microsoft's Data Access Components (MDAC) 2. 1. 2. 4202. 3 Service Pack   5.  The following third party databases need to be acquired and licensed by Telkom (if    not already acquired and licensed) to enable the software to be operated:



- 5 5 -     TELKOM CONTRACT No. 076C/01   SAP MARKETSET DATABASES             Jrun           JDK           Web           Server           DB            JDBC             LDAP                   NT 4. 0               HotSpot Server             1. 2. 2             MJHS IIS 4. 0            MS SQL 7 SP 2            I-NET OPTA 2000             4. 1. 2 on NT                     SOLARIS 8                  HotSpot Server                        1. 2. 2                   Apache 1. 3. 9 +                      Oracle DB 8. 1. 6                      Oracle Driver for JD                            1. 2                    Netscape LDAP v                    4. 1. 2 on Solaris         WINDOWS 2000                  HotSpot Server                        1. 2. 2                      MS IIS 5. 2                     MS SQL 7 SP2                    I-NET OPTA 2000                     Netscape LDAP v                        4. 1. 2 on NT



-56-    TELKOM CONTRACT NO. 076C/01      THUS DONE AND SIGNED at  WOODMEAD  by SYSTEMS APPLICATIONS PRODUCTS (AFRICA) (PROPRIETARY) LIMITED    on this 31st day of  March 2001    /S/               For SYSTEMS APPLICATIONS PRODUCTS (AFRICA)(Pty)limited     /                                                                                                 (who warrants his authority to so sign)   For:  TELKOM  SOUTH AFRICA LIMITED             (who warrants his authority to so sign)   /s/                                                                THUS DONE AND SIGNED at  Pretoria by the TELKOM SOUTH AFRICA LIMITED    on this 31st day of  March 2001       AS WITNESSES     Signature         /S/        Signature         /S/



- 57 -     TELKOM CONTRACT No. 076C/01   ANNEXURE 2   to   AGREEMENT   between   SYSTEMS APPLICATION PRODUCTS (AFRICA) (PTY) LTD   and   TELKOM SOUTH AFRICA LIMITED   MAINTENANCE FEE   1.     The Maintenance Fee shall be calculated at 17% of the License fee stipulated in          annexure 1 for the license of the SOFTWARE.   2.     MAINTENANCE SERVICES   SAP Africa (SAP) endeavours to provide the highest quality support and to ensure system stability throughout the life cycle of the Software solution. TELKOM will benefit through a lower total cost of ownership and will, in the future, experience an optimal usage of system resources and protection of existing investments.            7 x 24h Support Worldwide   SAP Customer Support delivers help for software problems in a fast and competent manner. SAP provides a 7 x 24h Support availability for messages with 'very high' priority using the 'Follow-the-Sun' model. At any given time of day an expert will be at hand to provide advice.   All Support centres are linked through a unique Support infrastructure, ensuring that all information provided to SAP is on hand regardless where or when.



- 58 -     TELKOM CONTRACT No. 076C/01   Software Maintenance   Software Maintenance includes the further improvement of the software, as well as the continuous adaptation of the software to new database and operating system versions.  Each new release contains solutions to all known software errors.   Delivery of Functional Enhancements and Updates to the R/3 Software   SAP and its Licensors continuously enhance and improve the Software to ensure that Licensees customers always have the latest technology and business functions (e. g. functionality supporting the introduction of the Euro). SAP ensures that customers always receive the latest release of the R/3 software as soon as it becomes available.    Integrated Support for SAP and Partner Products   SAP maintains Collaborative Support Agreements with SAP Partners who have provided Licensees with hardware, operating system and database platforms to ensure seamless support. Should a Licensee request SAP require the involvement of the respective partner, SAP has established interfaces and procedures to do so.    Access to 'SAP's Frontend (formerly: OSS)   SAP'sFrontend is a quick and user-friendly interface for communication between customers and SAP. Features include:   - Access to the Software Support Package repository for downloads   - Database access to individual problem solutions for downloads   - Knowledge Database access to a wealth of information on the use of the Software   - Electronic notification about important information (HotNews)   - Access to SAP's request handling process.   Support Services   The requirement for deriving the full benefit from SAP's Global Support Network is a remote connection from the customer's Software System to SAP's Frontend. This enables the efficient usage of SAP's portfolio of Remote Services and will enable customers to work with the SAP Support experts whenever required and in particular, at the start of their



- 59 -     TELKOM CONTRACT NO. 076C/01   implementation. Also, a remote connection is a prerequisite for 7 x 24h support for priority 1 messages.   Under the TeamSAP Support maintenance agreement, SAP Support deals with problem messages pertaining to:   - An error in the software   - An error in the software causes subsequent errors   - There are problems when implementing corrections   - There is no training or documentation available   - The functions are not logical   - The software ergonomics has flaws   Messages of this nature are responded to in writing via SAP's Frontend.   Any other messages are termed consulting issues and may be processed by either SAP's Remote Consulting department, the customer's implementation consultants or SAP consultants. This service is, however, priced separately and is not within scope of the maintenance agreement. Messages of this nature usually concern:   -  Processing logic of the software, the business processes and customising (questions  regarding working with transactions, programs and screens, the contents of screens  and  pr in touts ,   e tc .   )   - Administration or tuning of the SAP System, of the database or the operating system   - Errors caused by a modification of the system   - A solution is clear from the short text or from the help text of the system error   Maintenance Service Levels   Optimum support with fast reaction times is the cornerstone of SAP's Support organisation. SAP's Support process uses a three-tier Support structure:    Local Support (in 50 countries worldwide)   Local Support Centres at SAP subsidiaries are the local contact points for customers. During usual working hours, the Local Support Centres handle all inquiries relating to support in the language of the respective country and, if necessary, forward them to the



-60-    TELKOM CONTRACT NO. 076C/01    appropriate local partner or the nearest Regional Support Centre. Most inquiries are entered via SAP 's Frontend which offers all the advantages of automatic dispatching.    Regional Support (more than 400 Support professionals in four Regional Support Centres)   Regional Support Centres are located in Walldorf, Germany (Europe/Africa), Philadelphia, USA (Americas), Singapore (Asia-Pacific) and Tokyo, Japan (North East Asia). These Centres are responsible for processing support inquiries and also form part of the 7 x 24h support network. According to the 'FoIlow-the-Sun' principle, inquiries received outside normal working hours are automatically forwarded to the Regional Support Centre that is currently active. Another task is the co-ordination of regional partners in their co-operation with SAP customers.    Development Support (Europe, Americas, Asia)   SAP Africa's Local Support Centre supports all SAP customers in the Southern Africa/Sub- Sahara region. In the event of SAP Africa being unable to respond timeously or effectively, the support query will be elevated to COMMERCE ONE INC.. Inc. consultants, in which event, SAP Africa shall use its best endeavours to respond timeously in accordance with the service levels stipulated in the table below.   The Quality Management processes implemented throughout the SAP Support organisation are certified globally according to the international standard ISO 9002.   The workflow between the support levels is defined in an internal Support Level Agreement (SLA) and SAP's Support Process Monitoring team ensures that requests are forwarded smoothly between the support levels. SAP Africa, SAP AG and their respective licensors shall use their best endeavours and efforts to ensure that the below mentioned Initial Reaction Times and Projected Resolution Times (PRT) are achieved in 80% of all cases;   Priority   Very High (1)   High (2)   Medium (3)   Low (4)   Initial Reaction Time   (IRT)   30 minutes   2 hours   4 hours   8 hours   Projected Resolution Time   (PRT)   1 day   3 days   7 days   1 4 days   Priority 1: d, h, min = days, hours, minutes in actual time Priority 2, 3, 4: d, h, min = days, hours, minutes during office hours



- 61 -     TELKOM CONTRACT No. 076C/01   The initial reaction time (IRT) is the time elapsed between message receipt at SAP (Send to SAP in SAP Service System) and initial contact with the customer or change of the message status.   The Projected Resolution Time (PRT) is the time elapsed between IRT and providing a solution.   Priorities of messages are defined as follows:    Very High or Priority 1   A message with priority Very high is justified when critical restrictions in day-to-day operations are encountered. Critical tasks, especially time-critical jobs, cannot be performed, due to a total system shutdown or a malfunction in a main function of the production SAP system.   This message requires immediate processing, as the malfunction can result in serious losses.    High or Priority 2   A message with priority High is justified when serious restrictions in day-to-day operations are encountered. Necessary tasks cannot be performed due to a malfunction or failed function in the Software that is urgently required in the current situation.   The message requires rapid processing, because the continuing malfunction could cause a serious interruption in the entire production system.    Medium or Priority 3   A message with priority Medium is justified when restrictions in day-to-day operations are encountered. This is caused by a malfunction or failed functionality in the system.    Low or Priority 4   A message with priority Low is justified when day-to-day operations are not affected or only affected in a minor fashion. This is caused by a malfunction or failed functionality in the system that is not used daily or is only used rarely.   (Problem situations in test systems will normally result in a priority that is one level lower than the identical problem in a production system).



- 62 -     TELKOM CONTRACT No. 076C/01   On the anniversary of this AGREEMENT, the parties shall enter into discussions and   negotiations for the purposes of reviewing the aforestated maintenance service level terms,   more particularly, the related commercial terms thereof including, the maintenance fee and/or   percentages; the response, processing and resolution times; the penalties that may be   payable by SAP Africa and/or its licensors for failing to comply with such times and other   aspects of the maintenance services. The parties acknowledge that the market for the   SOFTWARE in South Africa is limited and that therefor it may be difficult to ascertain market   conditions for the purposes of reviewing such commercial and related terms. Accordingly,   the parties shall take cognisance of market conditions in other countries where the   SOFTWARE is being used. Should the parties be unable to agree upon any such   amendments within 30 days from the anniversary date, then such dispute shall be referred   for determination by the Arbitration Foundation of Southern Africa (AFSA) in accordance   with the rules of AFSA and to an arbitrator appointed by the Chairperson of AFSA upon   application by either party. The arbitrator shall upon request of either party, appoint a   suitably qualified expert to assist him in determining the dispute. Except in the case of   manifest error, the arbitrators' ruling shall be final and binding upon the parties but shall be   without prejudice to a party's other rights and obligations arising from the AGREEMENT.



- 6 3 -    TELKOM CONTRACT No. 076C/01     Customer Message Support   The process of customer message support is the interface between development and service. The process steps that impact upon the SLA are customer message recording, preliminary checking, search for relevant error notes (known problem solution), and problem analysis.   Life Cycle of a Customer Message   Refer to accompanying PDF for diagram    Telkom customers can access the SAP's Frontend or SAPNet-Web Frontend and create their own requests and messages. Customer requests and messages that are received in writing via fax (+27 11 2356004) are first processed by the support facility of the Local Support Centre and then recorded for further processing in SAP's internal customer support system. A request or message is automatically assigned to an administrator in the SAP support organization (Local Support and Regional Support for the Software) based on the components assigned to it.   Performing preliminary checks, searching for troubleshooting information   The processor first checks whether the problem report is complete, and whether an entry has already been made in the system containing a solution to the reported problem. This search is conducted semi-automatically in SAP's support system. If an entry is found containing a solution to the problem, then the person who had submitted the problem report is notified in writing via SAPNet and the problem is closed for SAP.   Problem Analysis   If, following preliminary analysis, the Local Support level decides that the problem must be handled by an expert in the respective component, the problem is passed on to the Regional



- 64 -     TELKOM CONTRACT No. 076C/01   Support level. If the problem involves a program error or if the processor cannot find a solution despite intensive analysis, he or she transfers it to the Development Support level. The responsibility for Development Support lies with the user departments of the development areas.   If no relevant error note (known solution) exists, the customer shall provide SAP with sufficient test time and support, as an attempt is made to reproduce the reported problem and to determine whether it is a problem with the software (at SAP or in the customer's system, provided that the latter does not negatively affect the customer's operations). If this reproduction of the problem is not possible, the next time the problem occurs, additional analyses are performed to narrow down the source of the problem. In the meantime, the problem receives the status of customer action in the support system. If special handling by an expert is required, then it is relayed to Development Support.   Escalation Management   In the event of SAP's Support Management deciding that the standard support processes are insufficient to solve a critical customer situation (problems as described in point 2 above) a formal escalation process is invoked.   During this process, SAP will assign the required SAP personnel to the customer remotely (via a remote connection) and/or on site, as appropriate. These resources will be under the direct supervision of SAP's management and the customer will not incur any costs.   A formal de-escalation process, involving an assigned Customer Services Manager, will take place once the critical issue has been resolved.   During the implementation phase prior to the SOFTWARE being installed, SAP AFRICA and TELKOM will negotiate with each other to discuss and agree upon an appropriate detailed escalation process for the Maintenance Services that SAP AFRICA and its licensors will provide and that will apply during the said implementation phase and the go-live stage. The parties shall also determine an escalation process that is appropriate for TELKOM'S needs and business requirements when USING the SOFTWARE.



-65-    TELKOM CONTRACTN0. 076C/01   THUS DONE AND SIGNED at  WOODMEAD  by SYSTEMS APPLICATIONS PRODUCTS   (AFRICA) (PROPRIETARY) LIMITED    on this 31st day of  March 2001    /S/                  /S/                                                   (who warrants his authority to so sign)   For:  TELKOM  SOUTH AFRICA LIMITED             (who warrants his authority to so sign)   /s/                                                                THUS DONE AND SIGNED at  Pretoria by the TELKOM SOUTH AFRICA LIMITED    on this 31st day of  March 2001 in the presence of the undersigned witnesses       AS WITNESSES     Signature         /S/        Signature         /S/



- 66 -     TELKOM CONTRACT No. 076C/01   ANNEXURE 3   to   AGREEMENT   between   SYSTEMS APPLICATION PRODUCTS (AFRICA) (PTY) LTD   with   TELKOM SOUTH AFRICA LIMITED   1.           ESCROW ARRANGEMENTS   1. 1       SAP Africa warrants that the entire source code for the SOFTWARE owned by   or licensed by SAP AG and/or COMMERCE ONE INC.. (Source Code),   together with related DOCUMENTATION as it is, or becomes available, shall   be deposited into an escrow account by no later than 30 June 2001 which is   maintained at Volksbank Wiesloch, Germany (the Escrow Agent), pursuant   to an agreement between the Escrow Agent and SAP AG (the Escrow   Agreement). The Escrow Agreement provides that the Escrow Agent shall,   under certain circumstances, release the Source Code and related   DOCUMENTATION to TELKOM.   1. 2       SAP Africa further warrants that SAP AG will from time to time (as soon as   the relevant RELEASE and/or VERSION has been finalised) deposit into the   escrow account copies of all new versions of the Source Code and related   DOCUMENTATION encompassing any and all copies of all versions of the   Source Code and related DOCUMENTATION encompassing any and all   CORRECTION LEVELS.



- 67 -     TELKOM CONTRACT No. 076C/01   1. 3                       TELKOM may, at its own cost, verify that the new version of the Source Code   is deposited with the Escrow Agent.   1. 4                       Without prejudice to any express provision to the contrary contained in the   AGREEMENT, TELKOM shall have the right to access the Source Code if   SAP:   1. 4. 1                           is in default of any material term, condition or provision of this   AGREEMENT as a consequence of which the TELKOM is prevented from   having substantial USE and benefit of the SOFTWARE in terms thereof   and remains in default for a period of 30 (thirty) days from receipt of the   first written request to remedy the default concerned; or   1. 4. 2                            ceases to carry on business or to provide the particular USE, service or   benefit referred to in clause 12. 4. 1; or   1. 4. 3                           becomes bankrupt or has a receiving order made against it, or is placed in   liquidation or under judicial management in either case, whether   provisional or final, or is deregistered.   1. 5                       TELKOM shall not have the right to access the Source Code if SAP AG or a   SAP AG affiliate agrees to assume, carries out and continues to carry out,   SAP Africa's maintenance obligations under this AGREEMENT, pursuant to   the terms and conditions hereof.   1. 6                       TELKOM recognises and agrees that the Source Code and all parts thereof, is   the valuable proprietary and confidential information and trade secrets of SAP   AG, and shall remain so even after a release of the Source Code to TELKOM   under the Escrow Agreement. In the event of a release of the Source Code to   TELKOM under this AGREEMENT, TELKOM agrees to hold same in strict   confidence and to take appropriate action to preserve its confidentiality, and



- 68 -     TELKOM CONTRACT No. 076C/01   TELKOM shall have a non-exclusive, non-transferable LICENCE to USE the   Source Code solely for its own use in order to support and maintain the   SOFTWARE and for no other purpose whatsoever. TELKOM shall USE the   Source Code only at its own premises on its own data processing equipment   or third parties in accordance with clause 3 of the AGREEMENT. TELKOM   agrees not to copy the Source Code, nor to disclose it to any third party except   Agents retained by TELKOM to assist in maintaining SOFTWARE, provided   that no such Agent is in the business of marketing or developing software   competitive to the SOFTWARE.



-69-     TELKOM CONTRACT No. 076C/01   THUS DONE AND SIGNED at  WOODMEAD  by SYSTEMS APPLICATIONS PRODUCTS   (AFRICA) (PROPRIETARY) LIMITED    on this 31st day of  March 2001    /S/               For SYSTEMS APPLICATIONS PRODUCTS (AFRICA)(Pty)limited     /                                                                                                 (who warrants his authority to so sign)   For:  TELKOM  SOUTH AFRICA LIMITED             (who warrants his authority to so sign)   /s/                                                                THUS DONE AND SIGNED at  Pretoria by the TELKOM SOUTH AFRICA LIMITED    on this 31st day of  March 2001       AS WITNESSES     Signature         /S/        Signature         /S/ 
Question: Highlight the parts (if any) of this contract related to Insurance that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?
answer:

Without limiting SAP AFRICA'S liabilities or responsibilities in terms of the   AGREEMENT, SAP AFRICA will provide and maintain insurance to cover its   liability and responsibilities in terms of this AGREEMENT.